Network World recently ran a blog post in Cisco Subnet that examined Cisco financials and concluded that an increase in the third quarter accounts receivable increase, a dip in the net sales increase and an increase in Days Sales Outstanding added up to channel stuffing, and we suggested:
Cisco was cooking the books.
This was supposition based solely on an interpretation of the numbers and, while Cisco didn't argue with the numbers, it refuted our conclusion and we apologize for the accusations.
According to Cisco:
"Cisco employs conservative policies regarding revenue recognition."
"For example, in our distribution channel, Cisco does not recognize revenue until product leaves our channel partner, effectually removing any possibility of recognizing revenue before it’s sold to the end customer."
My sincere apology to Cisco,
About Brad Reese on Cisco
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Cisco Strong-Armed you?
Is John Chambers the Tony Soprano of the IT world?
What happened Brad? did they get to you?
No, but right is right
No Rick,
Cisco did not strong-arm yours truly, although Cisco was very persistent in refuting my interpretation.
Also keep in mind that Cisco didn’t argue with the numbers.
But right is right and yours truly was wrong in making accusations that can't be proved.
Sincerely,
Brad Reese
http://www.BradReese.Com
You should be sued
Brad you come on and get Network World to put up on their main page that Cisco is cooking the books, now you admit you were wrong...people make decisions on which vendor they are going to invest in based on "industry experts". It is quite clear here that Brad you are no industry expert and your opinions are worthless.
Stick to things you know, like taking CCIE resumes and selling used Cisco gear.
My interpretation of Cisco's financial numbers stand
Yours truly was wrong to make the accusation:
Cisco is cooking the books.
However, during a 3 hour conference call with the representative of Cisco's financial team, yours truly became even more convinced that my original interpretation of the Cisco 3rd Qtr 2008 financial numbers is absolutely correct, I just can't prove it.
Furthmore, Cisco did not refute the accuracy of my numbers presented in the blog.
Finally, Cisco refused to have an individual at Cisco go on the record with the statement below they wished published on Network World:
"Cisco employs conservative policies regarding revenue recognition."
"For example, in our distribution channel, Cisco does not recognize revenue until product leaves our channel partner, effectually removing any possibility of recognizing revenue before it’s sold to the end customer."
Why would Cisco not want the above statement attributed directly to an individual working at Cisco?
Where is the accountability should the statement above prove incorrect?
Sincerely,
Brad Reese
http://www.BradReese.Com
Cisco is not another Enron
Cisco finance mis-represenitng financial numbers is a very serious accusation. If the Financial Managers at Cisco are doing such things, there is potential financial fraud resulting in Jail Time at Club Fed.
I truly doubt this to be the case.
Cisco is NOT misrepresenting financial numbers
Fannie,
As stated earlier, Cisco did NOT refute the accuracy of the numbers in my blog.
Additionally, Cisco is NOT misrepresenting their financial numbers.
Cisco does NOT agree with the interpretation of their financial numbers by yours truly.
Sincerely,
Brad Reese
http://www.BradReese.Com