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No. of Recommendations: 0
Rational (RATL)                                   
                 Current Period Year-ago Period    1 Year   
                         Mar-99         Mar-98     Growth              
Income Statement . . . 
  Sales                   411.9          310.7     32.6%                 
  Cost of Goods            44.1           42.2      4.5%                
  Net Income               59.2          -38.3       N/A                 
  Shares Outstand    86,075,000     88,975,000     -3.4%

Balance Sheet . . .
  Current Assets          454.0          445.2      2.0%            
  Current Liabili         155.9          151.5      2.9%               
  Long-term Debt           00.0           00.2       N/A                 
                                                                          
Margins & Ratios . . .
  Gross Margins            89.3%          86.4%     3.4%                
  Net Margins              20.5%          -9.3%      N/A 


Over the last 5 years, sales have grown on average 38% per 
year. Earnings have increased on average 18% per year for 
the same period. They have no long-term debt.
                 
It's concerning that earnings have grown only half as fast as
sales. Why is the company bringing in more money, but they
cannot pass it on to the investor as earnings? One of Rational's
competitor's, Mercury Interactive, seems to handle finances a 
little better. Sales have grown about the same for both companies
showing a similar market, but earnings growth is quite different.

Over the last 5 years, Mercury's sales have grown on average 
36% per year. Earnings have increased on average 39% per year 
for the same period. They also have no long-term debt.


                   Mercury Interactive (MERQ)                                   
                 Current Period Year-ago Period    1 Year   
                         Dec-99         Dec-98     Growth              
Income Statement . . . 
  Sales                   168.6          121.0      39.3%            
  Cost of Goods            16.5           13.9      18.7%            
  Net Income               31.5           21.8      44.4%                  
  Shares Outstand    38,360,000     36,626,000       4.7%

Balance Sheet . . .
  Current Assets          454.0          445.2       2.0%        
  Current Liabili          75.6           58.0      30.3%                   
  Long-term Debt           00.0           00.0        N/A                 
                                                                          
Margins & Ratios . . .
  Gross Margins            90.2%          88.5%      1.9%               
  Net Margins              23.4%          22.6%      3.5%
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