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To: Chuzzlewit who wrote (85058)	12/13/1998 3:19:00 PM
From: jim kelley	Read Replies (2) \| Respond to of 176387

CTC, Re: CPQ's Negative working capital.... I thought this was interesting in the CPQ 10-Q which has been recently revised: NEW BASIS OLD BASIS JUNE 27, 1998 DECEMBER 27, 1997 --------------- ------------------- (IN MILLIONS) (IN MILLIONS) Current assets $ 4,955 $ 6,428 Noncurrent assets 7,911 2,365 Current liabilities 5,213 3,487 Noncurrent liabilities 1,198 1,910 Stockholders' equity 6,455 3,396 Subtract current liabilities from current assets: $ 4,955 M - $ 5,213 M = - 258 M This shows that CPQ had negative working capital in late June. Hence, I believe that the reason they have not been able to implement their restructuring and layoff plans is that they do not have the working capital available to write the checks necessary to implement the plan. They in effect have a liquidity crunch. Regards, Jim Kelley