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To: hpeace who wrote (29308)	2/5/1998 12:44:00 AM
From: G.M. Flinn	Read Replies (1) \| Respond to of 176387

Steve, asking for proof of an opinion of the future is quite challenging. An opinion is just that, an opinion. Your ramblings about Sr. Mgmt. tasks at CPQ 15 years ago have nothing do with the combining TODAY of three multi-billion dollar companies in an extremely challenging and dynamic global economy. Difficult to do, not impossible. I hope CPQ is up to the challenge. But it will take time and probably a bit of pain to accomplish. I like DELL's odds for stock appreciation much better than CPQ's. Let's just watch the show! P.S. S.I. offers a spell-checker now. You might consider using it <ggggggggg>. (TU ... Texas Utilities?)

To: hpeace who wrote (29308)	2/5/1998 1:06:00 AM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

hpeace, From the link in your post: "Our analysis indicates that if Mason (CFO of Compaq) can simply bring DEC's days outstanding of accounts receivable and accounts payable and DEC's inventory turns into line with Compaq's, he should be able to reduce the cost of acquisition from $9.4 to $3.5 billion. The latter amount is less than four times-that's right, four times- DEC's projected NOPAT in 1999." This is a very odd analysis, since neither accounts receivable nor accounts payable management affect profit. Improving them will certainly improve the cash flow of the company, but it will not affect the acquisition price because you are trading one asset (A/R) for another (cash). Increasing inventory turns increases profits by reducing inventory holding costs and risk, but the real key is gross profits, which is a combination of gross margin, inventory turns and inventory levels. Perhaps this is an example of doing the impossible? <VBG> Regards, Paul