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

To: rudedog who wrote (85079)	12/13/1998 1:38:00 AM
From: robbie	Read Replies (1) \| Respond to of 176387

<<Hate to keep reminding you and others but CPQ makes better than 20% on these low end products, and looks to be at 30% overall - Dell is at about 23% overall.>> They just can't get it right. And...most of them spell "losing" wrong. If they're going to spray-paint vulgar graffiti on buildings and bridges, at least they should spell it right. jajajajajajajajajajajajajajajajaja

To: rudedog who wrote (85079)	12/13/1998 11:07:00 AM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Rudy: 20% is an illusion. Remember, because of the slowness of receipts Compaq is factoring a hefty number of its A/Rs. Factors buy A/R at a discount, and last I checked, the cost of factoring was not accounted for as a gross profit item. So, If the factor buys at, say, a 5% discount the effective profit margin drops from 20% to 15%. Given the recurring nature of this activity it might be prudent to consider this as a variable cost. It seems to me that the real issue is why Compaq is struggling to establish a positive cash flow. No business in its right mind factors A/R given any choice, and yet Compaq has been doing this for some time. The cost is just too high, and generally indicative of undercapitalization. TTFN, CTC