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Hi,

Could someone help me with my following problem?

I was reading TMF's article (http://biz.yahoo.com/mf/000815/hill_000815.html) on using EV/IC as valuation measurement with interest and tried to use it myself. The number I got for CSCO was different from the one in the article.

EV (enterprise value) was defined as market capitalization plus long-term debt minus cash and short-term investments. IC (invested capital) was calculated using the Fool's formula of total assets minus non-interest bearing current liabilites minus cash.

Using the above formulae, I obtained the following numbers for JNPR and CSCO, assuming the stock price of 148.9 for JNPR and 65.5 for CSCO on June 30.

my numbers the article's numbers
JNPR (Q2, June, 00) JNPR (Q2, June, 00)
EV $50,400 m EV 50,406.6
IC $512.6 m IC 512.6
EV/IC 98x EV/IC 98x

CSCO (Q4, July, 00) CSCO (Q4, July, 00)
EV 489,393 EV 474,753
IC 22,149 IC 8,239.5
EV/IC 22x EV/IC 58x

From the numbers above, one can see that I got the same EV/IC for JNPR as the article did. But the article had an EV/IC of 58 for CSCO and I got 22 for the EV/IC. The number would be 30 if I used Q3 numbers for CSCO. As one can see from the above tables, the difference arises from the IC numbers. I can't find anything was wrong with my IC of $22,148 million for CSCO. Could someone help me find the error here?

Thank you very much for your help in advance.
(I'm sorry that I accidentally submitted this post before I finished it).

Leon.
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