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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Jim Patterson who wrote (37952)	4/15/1998 3:20:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

Jim, re: I just think it is unusual for a company doing as well as DELL on all fronts of business to need to do a Debt offering. That's because you don't understand finance. If debt is used for working capital purposes, I would view that as a negative because it means that Dell's cash conversion cycle is slowing. In general, debt increases reward and risk to shareholders. That's why I cautioned a certain "Steve" on this thread not to judge companies on return on equity (ROE), because that number is very sensitive to debt levels. Here's an example Company A has assets of $500 MM, no LT debt and equity of $400MM. It earned $100MM, so it has a ROE of 25%. Company B is identical in every respect, except that it has debt of $200 MM (at 6%), so earnings were reduced by the interest of $12MM to $88MM (I know, interest is tax deductible, but I'm trying to make this simple!). So now we have a return on equity of 44%, just by using debt and buying back equity. TTFN, CTC

To: Jim Patterson who wrote (37952)	4/15/1998 3:22:00 PM
From: jim kelley	Respond to of 176387

Jim Patterson RE: My information is believed to be from reliable sources. I can not guarantee it's accuracy. Some statements may be false or misleading. Could you let us know which of your statements are false and misleading or do we have to guess? You are still a helluva guy!