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To: divvie who wrote (60682)	8/25/1998 10:04:00 AM
From: liber 1	Respond to of 176387

To: Divvie From: Liber 1 Trial Member In response to your posting to Chuzzlewitt, don't all businesses invest their capital for profit, called ROIC? Is CPQ out of the ordinary for doing this?

To: divvie who wrote (60682)	8/25/1998 10:35:00 AM
From: rudedog	Read Replies (2) \| Respond to of 176387

divvie - Without these, earnings growth for 96 and 97 would have been flat I'm not sure i understand this. If CPQ had not factored receivables in 96, their 97 earnings would have reflected that factoring times 1.1 - i.e. it would have added to 97 earnings. Likewise, if they had not factored 97 sales, 1Q98 would have shown a substantial profit instead of break-even. Factoring is a decision made primarily on the basis of present value of money. It may have been used in this case to boost 97 year-end figures but if so that was a pretty short-term tactic. I don't think this was a smart decision on CPQ's part - it was a bet on 1Q sales that did not happen. But misleading?? not to the folks on this thread who look carefully at the numbers. Jim Kelley and others on this thread were all over the factoring story back in January.