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Category > Accounting Posted 11 Jun 2017 My Price 8.00

Analysis of liquidity and profitability measures of Dell Inc.

Analysis of liquidity and profitability measures of Dell Inc. The following data (amounts in millions) are taken from the February 3, 2012, and January 28, 2011, comparative financial statements of Dell Inc., a direct marketer and distributor of personal computers (PCs) and PC-related products:

DELL INC.

Consolidated Statements of Income

Fiscal Year Ended February 3, January 28,

2012 2011

Net revenue ................................................................................. $62,071 $61,494

Cost of net revenue...................................................................... 48,260 50,098

Gross margin............................................................................ 13,811 11,396

(continued)

	February 3, 2012	January 28, 2011
Operating expenses: Selling, general, and administrative ...........................................	8,524	7,302
Research, development, and engineering .................................	856	661
Total operating expenses ......................................................	9,380	7,963
Operating income .................................................................	4,431	3,433
Interest and other, net ..................................................................	(191)	(83)
Income before income taxes.....................................................	4,240	3,350
Income tax provision ....................................................................	748	715
Net income...............................................................................	$3,492	$2,635


DELL INC. Consolidated Statements of Financial Position
February 3, 2012		January 28, 2011
Assets
Current assets:
Cash and cash equivalents .......................................................	$13,852	$13,913
Short-term investments ............................................................	966	452
Accounts receivable, net...........................................................	6,476	6,493
Short-term ﬁnancing receivables, net ........................................	3,327	3,643
Inventories, net .........................................................................	1,404	1,301
Other current assets .................................................................	3,423	3,219
Total current assets ...............................................................	29,448	29,021
Property, plant, and equipment, net ..........................................	2,124	1,953
Long-term investments.............................................................	3,404	704
Long-term ﬁnancing receivables, net ........................................	1,372	799
Goodwill ...................................................................................	5,838	4,365
Purchased intangible assets, net ..............................................	1,857	1,495
Other noncurrent assets ...........................................................	490	262
Total assets...........................................................................	$44,533	$38,599
Liabilities and Stockholders’ Equit	y
Current liabilities:
Short-term debt........................................................................	$ 2,867	$ 851
Accounts payable.....................................................................	11,656	11,293
Accrued and other....................................................................	3,934	4,181
Short-term deferred services revenue .......................................	3,544	3,158
Total current liabilities ............................................................	22,001	19,483
Long-term debt............................................................................	6,387	5,146
Long-term deferred services revenue ...........................................	3,836	3,518
Other noncurrent liabilities ............................................................	3,392	2,686
Total liabilities ........................................................................	35,616	30,833
Stockholders’ equity:
Common stock and capital in excess of $.01 par value; shares
authorized: 7,000; shares issued: 3,369 respectively;
shares outstanding: 1,761 and 1,918, respectively................	12,187	11,797
Treasury stock, at cost; 1,154 and 976 shares, respectively .....	(31,445)	(28,704)
Retained earnings.....................................................................	28,236	24,744
Accumulated other comprehensive loss....................................	(61)	(71)
Total stockholders’ equity......................................................	8,917	7,766
Total liabilities and equity .......................................................	$44,533	$38,599

At January 30, 2010, total assets were $33,652 and total stockholders’ equity was

$5,641.

a. Calculate Dell, Inc.’s, working capital, current ratio, and acid-test ratio at February 3, 2012, and January 28, 2011. Round your ratio answers to two deci- mal places.

b. Calculate Dell’s ROE for the years ended February 3, 2012, and January 28, 2011. Round your ratio answers to two decimal places, and your percentage answers to one decimal place.

c. Calculate Dell’s ROI, showing margin and turnover, for the years ended February 3, 2012, and January 28, 2011. Round your ratio answers to two deci- mal places and your percentage answers to one decimal place.

d. Evaluate the company’s overall liquidity and profitability.

e. Dell, Inc., did not declare or pay any dividends during the years ended February 3, 2012, or January 28, 2011. What do you suppose is the primary reason for this?

Answers

Alpha Geek

(8)

Status NEW Posted 11 Jun 2017 07:06 AM My Price 8.00

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Attachments

file 1497165576-1361063_1_636326890640509861_Solution.docx preview (606 words )

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