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To: MSB who wrote (34374)	4/11/1999 1:18:00 PM
From: Chuzzlewit	Respond to of 108807

Mike, the reason is that it might be indicative of aggressive accounting. For example, they may be booking revenues that are contingent on ultimate sales, but this could be several quarters removed. Look at CPQ's Q4 10-Q to see how this can mess a company up. This was the key that allowed me to spot the problems with OXHP before it crashed. That's the subtext of why analysts ought to look at changes in DSO closely. Unfortunately, too many of them don't take the next step. It's the same idea with looking at the difference between provision for income taxes and income taxes paid. The first is an accrual item based on accelerated depreciation (ACRS) which is OK, but some companies may also include some pretty aggressive accounting (which is what we'd like to discover). So big differences can be a red flag, because companies are loath to overpay taxes. I hope this helps. TTFN, CTC