No. of Recommendations: 18
KARM REPORT-12/12/00 SUMMARY				

Buying Criteria:		Benchmark	EMC	NTAP	SUNW	IBM
Dominant Brand			0-1 point	1	1	1	1
Repeat-purchase business	0-1 point	1	1	1	1
Convenience			0-1 point	1	1	1	1
Expanding possibilities		0-1 point	1	1	1	1
Rule Maker Ranking:					
	>=50			2 points	2	2		
	40 - 49			1 point				1	
	<40			0 point					0
Year over Year Sales Growth:					
	>+30%			2 points	2	2	2	0
	15 - 29%		1 point				
	<15%			0 point				
Gross margins:					
	>50%			2 points	2	2	1	0
	40 - 50%		1 point			 	
	<40%			0 point				 
Net profit margin:					
	>20%			2 points	2	0	0	0
	15 - 20%		1 point				
	< 10%			0 point				
Cash:					
	No debt			2 points		2		
	>1.5 x total debt	1 point		1		1	
	< 1.5 x total debt	0 point					0
Flow ratio:					
	<1.0			2 points				
	1 - 1.25		1 point		0	1	1	0
	>1.25			0 point					
Cash king margin:					
	>20%			2 points	2	2		
	10-20%			1 point				
	<10%			0 point				0	0

Total KARM Points		18 possible	15	15	10	4
Rulemaker Ranker: EMC
Financial Analysis	Company Being Evaluated:				Competitor #1	Competitor #2	Competitor #3	
								
			EMC							NTAP		SUNW		IBM	
			Current Period	Year-ago Period	Year-over-Year  Current Period	Current Period	Current Period	
			9/30/00		9/30/99		Growth			10/27/00	10/1/00		9/30/00	
Income Statement								
  Sales			2,283 		1,709 		33.6%			261 		5,045 		21,781 	
  Cost of Goods Sold	814 		696 		16.9%			99 		2,615 		13,980 	
  Net Income		458 		296 		54.9%			35 		510 		1,963 	
  Shares Outstanding	22 		21 		5.3%					
								
Balance Sheet								
  Cash & Equivalents	2,708 		1,824 		48.5%			448 		2,492 		3,033 	
  Current Assets	5,725 		4,320 		32.5%			680 		7,557 		40,037 	
  Short-term Debt	13 		9 		37.4%			0 		2 		10,695 	
  Current Liabilities	1,874 		1,398 		34.0%			206 		4,882 		32,812 	
  Long-term Debt	151 		698 		-78.3%			0 		2,137 		18,696 	
								
Cash Flow Statement								
  Operating Cash Flow	1,603 		909 		76.3%			148 		701 		4,548 	
  Capital Expenditures	592 		368 		60.6%			39 		244 		2,501 	
					
Margins & Ratios . . .													 Competitors' Average
  Gross Margins		64.4%		59.3%		5.1			62.1%		48.2%		35.8%		       48.7%
  Net Margins		20.1%		17.3%		2.8			13.4%		10.1%		 9.0%		       10.8%
  Cash-to-Debt		16.54		2.58	      541.5%		      4480.00		 1.17		 0.10			0.19
  Net Cash		2544.4		1116.8	      127.8%		       447.9	       353.0	    -26358.0	    -8519.0
  Fool Flow Ratio	1.62		1.80	       -9.8%			 1.13		 1.04		 1.67			1.28
  Cash King Margin	44.3%		31.7%	       12.7			41.8%		 9.1%		 9.4%		       20.1%
								
													
								
Ranking Rule Makers								
								
1) Brand	Points (0-1)				3) Financial Direction	Points (0-3)		
Familiarity	1				Sales Growth			3		
Openness	1				Gross Margins			3		
Optimism	1				Net Margins			3		
Legitimacy	1				Shares Outstanding		1	
Inevitability	1				Cash-to-Debt			2	
Solitariness	1				Fool Flow Ratio			2	
Humor		1				Expansion Potential		3	
  Subtotal	7				  Subtotal			17	
							
2) Financial Location	Points (0-2)			4) Monopoly Status	Points (0-4)	
Mass Market Habit	2				Gross Margins		4	
Gross Margins		2				Net Margins		4	
Net Margins		2				Net Cash		4	
Cash-to-Debt		2				Fool Flow Ratio		0	
Fool Flow Ratio		0				Convenience		4	
Your Interest		2				  Subtotal		16	
  Subtotal		10						
							5) Your  Enjoyment	1	
							
	  Total Score	51	Top Tier!
Rulemaker Ranker NTAP
Financial Analysis	Company Being Evaluated:				Competitor #1		Competitor #2		Competitor #3	
								
					NTAP						EMC		SUNW			IBM	
			Current Period	Year-ago Period	Year-over-Year  		Current Period	Current Period		Current Period	
			10/27/00	10/29/99	Growth				9/30/00		10/1/00			9/30/00	
Income Statement								
  Sales				261 	125 		109.1%					2,283 		5,045 			21,781 	
  Cost of Goods Sold		99 	52 		92.8%					814 		2,615 			13,980 	
  Net Income			35 	16 		121.3%					458 		510 			1,963 	
  Shares Outstanding		364 	338 		7.7%					
								
Balance Sheet								
  Cash & Equivalents		448 	354 		26.8%					2,708 		2,492 			3,033 	
  Current Assets		680 	533 		27.6%					5,725 		7,557 			40,037 	
  Short-term Debt		0 	0 		No Debt					13 		2 			10,695 	
  Current Liabilities		206 	114 		81.1%					1,874 		4,882 			32,812 	
  Long-term Debt		0 	0 		0.0%					151 		2,137 			18,696 	
								
Cash Flow Statement	 							
  Operating Cash Flow		148 	43 		241.1%					1,603 		701 			4,548 	
  Capital Expenditures		39 	13 		198.5%					592 		244 			2,501 	
					
Margins & Ratios . . .																Competitors' Average
  Gross Margins			61.9%	58.7%		3.2					64.3%		48.2%			35.8%			49.4%
  Net Margins			13.6%	12.8%		0.7					20.1%		10.1%			9.0%			13.1%
  Cash-to-Debt			4481.00	3535.00		26.8%					16.51		1.17			0.10			0.26
  Net Cash			448.0	353.4		26.8%					2544.0		353.0			-26358.0		-7820.3
  Fool Flow Ratio		1.13	1.58		-28.6%					1.62		1.04			1.67			1.44
  Cash King Margin		41.5%	24.1%		17.4					44.3%		9.1%			9.4%			20.9%
								
															
								
Ranking Rule Makers								
								
1) Brand	Points (0-1)				3) Financial Direction	Points (0-3)		
Familiarity		1				Sales Growth			3		
Openness		1				Gross Margins			3		
Optimism		1				Net Margins			3		
Legitimacy		1				Shares Outstanding		0	
Inevitability		1				Cash-to-Debt			2	
Solitariness		1				Fool Flow Ratio			3	
Humor			1				Expansion Potential		3	
  Subtotal		7				 Subtotal			17	
							
2) Financial Location	Points (0-2)				4) Monopoly Status	Points (0-4)	
Mass Market Habit		2				Gross Margins		4	
Gross Margins			2				Net Margins		2	
Net Margins			2				Net Cash		4	
Cash-to-Debt			2				Fool Flow Ratio		2	
Fool Flow Ratio			1				Convenience		4	
Your Interest			2				  Subtotal		16	
  Subtotal			11						
								5) Your  Enjoyment	1	
							
	  Total Score	52	Top Tier!	
Rulemaker Ranker SUNW
							
Financial Analysis	Company Being Evaluated:				Competitor #1	Competitor #2	Competitor #3	
								
			SUNW							EMC		NTAP		IBM	
			Current Period	Year-ago Period	Year-over-Year  	Current Period	Current Period	Current Period	
			10/1/00		10/1/99			Growth		9/30/00		10/27/00	9/30/00	
Income Statement								
  Sales			5,045 		3,146 			60.4%		2,283 		261 		21,781 	
  Cost of Goods Sold	2,615 		1,513 			72.8%		814 		99 		13,980 	
  Net Income		510 		271 			88.2%		458 		35 		1,963 	
  Shares Outstanding	1,718 		1,677 			2.4%					
								
Balance Sheet								
  Cash & Equivalents	2,492 		2,475 			0.7%		2,708 		448 		3,033 	
  Current Assets	7,557 		7,662 			-1.4%		5,725 		680 		40,037 	
  Short-term Debt	2 		0 		Initiated Debt		13 		0 		10,695 	
  Current Liabilities	4,882 		3,128 		56.1%			1,874 		206 		32,812 	
  Long-term Debt	2,137 		1,880 		13.7%			151 		0 		18,696 	
							 	
Cash Flow Statement								
  Operating Cash Flow	701 		391 		79.3%			1,603 		148 		4,548 	
  Capital Expenditures	244 		229 		6.6%			592 		39 		2,501 	
					
Margins & Ratios . . .													Competitors' Average
  Gross Margins		48.2%		51.9%		-3.7			64.3%		61.9%		35.8%			54.0%
  Net Margins		10.1%		8.6%		1.5			20.1%		13.6%		9.0%			14.2%
  Cash-to-Debt		1.17		1.32		-11.5%			16.51		4481.00		0.10			0.21
  Net Cash		353.0		594.8		-40.7%			2544.0		448.0		-26358.0		-7788.7
  Fool Flow Ratio	1.04		1.66		-37.4%			1.62		1.13		1.67			1.47
  Cash King Margin	9.1%		5.1%		3.9			44.3%		41.5%		9.4%			31.7%
								
														
								
Ranking Rule Makers								
								
1) Brand	Points (0-1)				3) Financial Direction	Points (0-3)		
Familiarity	1				Sales Growth			3		
Openness	1				Gross Margins			0		
Optimism	1				Net Margins			3		
Legitimacy	1				Shares Outstanding		2	
Inevitability	1				Cash-to-Debt			0	
Solitariness	1				Fool Flow Ratio			3	
Humor		1				Expansion Potential		3	
  Subtotal	7				  Subtotal			14	
							
2) Financial Location	Points (0-2)			4) Monopoly Status	Points (0-4)	
Mass Market Habit	2				Gross Margins		0	
Gross Margins		1				Net Margins		0	
Net Margins		2				Net Cash		4	
Cash-to-Debt		1				Fool Flow Ratio		4	
Fool Flow Ratio		1				Convenience		4	
Your Interest		2				  Subtotal		12	
  Subtotal		9						
							5) Your  Enjoyment	1	
							
	  Total Score	43	Second Tier	
Rulemaker Ranker: IBM
								
Financial Analysis	Company Being Evaluated				Competitor #1	Competitor #2	Competitor #3	
								
			IBM						EMC		SUNW		NTAP	
			Current Period	Year-ago Period	Year-over-Year  Current Period	Current Period	Current Period	
			9/30/00	9/30/99	Growth				9/30/00		10/1/00		10/27/00	
Income Statement								
  Sales			21,781 	21,144 	3.0%				2,283 		5,045 		261 	
  Cost of Goods Sold	13,980 	13,580 	2.9%				814 		2,615 		99 	
  Net Income		1,963 	1,757 	11.7%				458 		510 		35 	
  Shares Outstanding	1,810 	1,870 	-3.2%					
								
Balance Sheet								
  Cash & Equivalents	3,033 	6,026 	-49.7%				2,708 		2,492 		448 	
  Current Assets	40,037 	42,877 	-6.6%				5,725 		7,557 		680 	
  Short-term Debt	10,695 	14,096 	-24.1%				13 		2 		0 	
  Current Liabilities	32,812 	37,778 	-13.1%				1,874 		4,882 		206 	
  Long-term Debt	18,696 	13,807 	35.4%				151 		2,137 		0 	
								
Cash Flow Statement								
  Operating Cash Flow	4,548 	6,760 	-32.7%				1,603 		701 		148 	
  Capital Expenditures	2,501 	3,373 	-25.9%				592 		244 		39 	
Margins & Ratios . . .													Competitors' Average
  Gross Margins		35.8%	35.8%	0.0				64.3%		48.2%		62.1%				58.2%
  Net Margins		9.0%	8.3%	0.7				20.1%		10.1%		13.4%				14.5%
  Cash-to-Debt		0.10	0.22	-52.2%				16.51		1.17		No Debt!			2.45
  Net Cash		-26358.0-21877.0 N/A				2544.0		353.0		448.0				1115.0
  Fool Flow Ratio	1.67	1.56	7.5%				1.62		1.04		1.13				1.26
  Cash King Margin	9.4%	16.0%	-6.6				44.3%		9.1%		41.8%				31.7%
								
								
								
								
Ranking Rule Makers								
								
1) Brand	Points (0-1)				3) Financial Direction	Points (0-3)		
Familiarity		1				Sales Growth			0		
Openness		1				Net Margins			3		
Legitimacy		1				Shares Outstanding		3	
Inevitability		1				Cash-to-Debt			0	
Solitariness		1				Fool Flow Ratio			0	
Humor			1				Expansion Potential		3	
  Subtotal		7				  Subtotal			12	
							
2) Financial Location	Points (0-2)			4) Monopoly Status	Points (0-4)	
Mass Market Habit	2				Gross Margins			0	
Gross Margins		0					Net Margins		0	
Net Margins		1					Net Cash		0	
Cash-to-Debt		0					Fool Flow Ratio		0	
Fool Flow Ratio		0					Convenience		4	
Your Interest		2				  	Subtotal		4	
  Subtotal		5						
							5) Your  Enjoyment		1	
							
	  Total Score	29	Fourth Tier
NOTES: EMC has improved all of the metrics since last evaluated. Overall EMC has improved from 45, 2nd tier to 51, top tier. NTAP has also improved all of the metrics since last evaluated. Overall NTAP has improved from 46, 2nd tier to 52, top tier. Deb Brown
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