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MWON Name State Page Layout Formula Data a copy #tu. -AMenge Center $. % * Conditional Formes Cell Club Tant Farming Table Styles Asment B1 The following excerpts from Cisco Systems balance sheets are taken from the end of the year 1995 through 2000 and as of the end of the 1 A C D G H K M 1 (PB-7) The following excerpts from Cisco System's balance sheets are taken from the end of the fiscal years 1998 through 2002 and as of the end of the thir 2 quarter ending April 27, 2002. The April 27, 2002 numbers come from the Quarterly report (10-0that Cisco filed with the Securities Ad Exchange 3 Commission 4 (in millions) 5 July 31, 1999 July 31, 2000 uly 282001 April 27, 2002 6 Accounts receivable $ 1.269.00 $ 2,342.00 $ 1.754.00 S 1.336.00 7 Allowance for doubtful accounts 5 27.00 5 43.00 S 288.00 S 346.00 8 Net accounts receivable $ 1.242.00 $ 2.299.00 S 1.466.00 $ 990.00 9 10 Required 11 a. Comment on the trend in Cisco's gross accounts receivable from 1999 to 2002. What factors do you think contributed to this trend? 12 13 14 b. Compute the allowance for doubtful accounts as a percentage of gross accounts receivable. Comment on your findings 15 16 c. What are some of the possible explanations for your findings in parti Osco Systems 17 Cite any findings that might by alarming to the financial community related to animestment in 18 19 d. Assume that Cisco was being overly conservative in estimating its bad debt allowance in 2002 70 If actual bad debts in 2003 are not as much as expected, what effect will this have on Cisco's reported earnings in fiscal 2003