October 01, 2012
Businesses have to compete against other organizations and an effective way to analyze a business financial status is by completing a business analysis. Investors have to review reports to determine the company’s financial health. Business analysis consists of gathering financial data, trend analysis, business strategies, and market research. Essential to gather the financial data to compare when reviewing competitors such as income statements, balance sheets, and cash flow. Dell’s business analysis consists of financials, focus areas, and benchmarking that will be compare against competitors Hewlett Packard and Apple.
Dell focuses on the following major customer segments: large enterprise, public sector, and consumer. Dell places more emphasis on corporate, small business, government, education, health care, SMB market, and individual consumers. Dell has two different divisions marketing and sales in each of its geographic regions. Dell will continue its simplicity program to help Enterprise customers remove “unnecessary cost and complexity” in IT operations and architecture ("About Dell", 2012). Dell is expects to continue relying heavily on contract support personnel and third party providers as a way of keeping costs down and providing service in remote locations. Dell breaks its worldwide operations out by three geographic regions: The Americas, Africa (EMEA), Asia Pacific-Japan, Middle East, and Europe. Dell is focuses on “BRIC” countries as a way to drive “significant growth” over the next few years ("About Dell", 2012). Dell’s services revenue increased 10% between FY09 and FY12 to $9.7 billion. • Americas Commercial: 14% revenue growth.
• APJ Commercial: 6% revenue growth.
• EMEA Commercial: 1% revenue decline.
• Deferred service revenue balance: 7% revenue growth.
The income statement is composes of three financial statements in a business. The income statement has two parts: non-operating and operating sections. The operating margins are very important to investors and analysts because of the disclosure of revenues and expenses. Dell and Hewlett Packard are comparable for their operating margins ranging from Dell 5.15% to Hewlett Packard 7.48%. Apple was at an astounding 35.62%. Dell’s revenue of $14.48B in comparison to Apple’s $148.81B is in a different league.
The balance sheet is very important as it reports the financial position of the company at a certain time. The company’s assets and liabilities lists to provide a balance. Dell’s total assets as of 2012 were $44,533,000, Hewlett Packard $129,517,000 and Apple $116,371,000. Dell’s total current liabilities are $35,616,000, Hewlett Packard $90,892,000, and Apple $39,756,000. Dell’s assets in comparison to the liabilities are causing concern as there is only a differential of $8, 9170.00. However, by reviewing the balance sheet Dell’s financial position indicates that the company is maintaining place in market.
After reviewing the cash flow sheet it becomes very clear that Dell is in more financial trouble than Hewlett Packard and Apple. Dell’s total change in cash and cash equivalents is $5,527,000, Hewlett Packard $12,639,000, and Apple $37,529,000. Dell’s total cash equivalent would not be enough to cover the company’s liabilities. Under the cash flow statement the consumer will determine the cash flow coming in and out of the business. If Dell was consistently producing more cash than it is using, the business can intensify its dividend, reduce debt or securing stock. Management can use this information to find ways of liquidating some of their assets into cash or cash equivalents. Financial intuitions and creditors want to see a little more cash on hand or put into short-term investments. Short- term investments are easier to invest...