Jae -
I am looking at CSCO's financial statements on OSV and have two questions:
1. The income statement for 2001-2005 is missing, although the balance sheet and cash flow statement data is provided. Why is the IS incomplete?
2. Does the data provider (looks like Smart Money) have a separate line for interest income, since there is also a separate line for interest expense? For the fiscal year ending July 2010, CSCO's interest expense was $623M, as OSV shows. But CSCO also had $635M of interest income per the 10-K, due to almost $40 billion of cash, cash equivalents, and investments. Here's why a separate line for interest income matters: when we calculate EV/FCF, we need to know interest income/(expense), whose after-tax income/(expense) is subtracted from (added to) operating cash flow. If we do not subtract AT interest income, then CSCO's EV/FCF is understated; i.e., the business looks more profitable, and hence cheaper, than it what we will realize in the years ahead. After all, if you put CSCO's net cash into your personal checking account after you buy the business (which is the theory behind EV), then CSCO's income statement and operating cash flow lose the interest income that arises from this cash pile.
OSV is a great tool. I have told friends buying OSV will be the best money I spend in 2011. Thank you for for sharing, and for letting your customers help you make OSV even more robust.
Hewitt Heiserman
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