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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year -- Ignore unavailable to you. Want to Upgrade?

To: Bipin Prasad who wrote (1721)	7/31/1998 1:48:00 PM
From: Just_Observing	Read Replies (3) \| Respond to of 4509

Currency Adjustment for SAP's Growth Rate of 61% I have calculated the average value of the DM per dollar for the first six months of 97 versus the six months of 98. I took the 1st and 15th of each month and averaged to find the values. In 1997, the average value of the DM per dollar was 1.68 In 1998, the value was 1.807 DM per dollar. Let us assume that 70% of SAP's revenues were in dollars (can change assumption as required). Let's say SAP's revenues were 100 DM in 1997 SAP's revenues in 1998 will be 161 DM Out of 161 DM, International Revenues would be 0.7161 = 112.7 DM Local Revenue in DM = 161 -112.7 = 48.3 DM Let's correct IR for currency changes = 112.71.68/1.807 = 104.78 Currency corrected revenue for 1998 = 104.78 + 48.3 = 153.08 The growth rate has magically fallen from 61% to 53% These are actual numbers based on 70% revenues based in dollars. Now, how does PSFT look with a growth rate of 77% versus 53% ??? Would you still pay a 250%+ premium for SAP? IMHO, one has to be very careful in dealing with foreign companies. Just my viewpoint. Please arrive at your conclusions. Good Luck.