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

To: Meathead who wrote (46555)	6/6/1998 9:03:00 PM
From: Chuzzlewit	Respond to of 176388

Hi Meathead, Neither, actually it's freed up cash. The more inventory you carry the greater the capital requirements to run a business. The remarkable thing about Dell is the way Tom Meredith has stressed the cash conversion cycle. The lower the number, the smaller the cash requirements to run the business. That means that cash is freed up for other purposes like building plants and buying back stock. Rapidly growing businesses generally require a lot of externally provided capital, either in the form of secondary equity issues or debt. Under Meredith's guidance a formidable cash generating machine has been created. The net effect is to lower the company's cost of capital. Based on what I've read, Tom Meredith has got to be the finest CFO I've ever heard of. Dell's rapid expansion would not have been possible without his hand. In fact, I ran a two day seminar on interpreting financial data (income statements, cash flow statements and balance sheets) using Dell as a model and using Meredith as the ideal. I cannot say enough about this man's brilliance. I realize that Im rambling, and I don't mean to sound pollyanish, but this guy just blows me away! That's why I was astounded when they announced plans to cut inventory to four days. That's like improving perfection! TTFN, CTC