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Dell's Working Capital Business Case

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Dell's Working Capital Business Case
Assigment 1 Dell’s working Capital
Student number Name Class
0804809 Shu Pei Sun BE37
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Question 1:
Kennis Inzicht Toepassen x x 5 punten

Calculate the level of working capital for Dell for the years 1994, 1995 and 1996. (Please show the full calculation and formula’s used)

The total current assets in 1996 are: $ 1.957.000
The total current assets in 1995 are: $ 1.470.000
The total current assets in 1994 are: $ 1.048.000

The total current liabilities in 1996 are: $ 939.000
The total current liabilities in 1995 are: $ 752.000
The total current liabilities in 1994 are: $ 538.000

Work capital of 1996 is: $ 1.957.000 - $ 939.000 = $ 1.018.000
Work capital of 1995 is: $ 1.470.000 - $ 752.000 = $ 718.000
Work capital of 1994 is: $ 1.048.000 - $ 538.000 = $ 510.000

Question 2:
Kennis Inzicht Toepassen x x 10 punten

Calculate the Quick Ratio and Current Ratio for Dell for the years 1994, 1995 and 1996 and give your opinion about those figures. (Please show the full calculation and formula’s used)

The total current assets in 1996 are: $ 1.957.000
The total current assets in 1995 are: $ 1.470.000
The total current assets in 1994 are: $ 1.048.000

The total current liabilities in 1996 are: $ 939.000
The total current liabilities in 1995 are: $ 752.000
The total current liabilities in 1994 are: $ 538.000

Current ratio of 1996 is: $ 1.957.000 / $ 939.000 = 2,08
Current ratio of 1995 is: $ 1.470.000 / $ 752.000 = 1,95
Current ratio of 1994 is: $ 1.048.000 / $ 538.000 = 1,95

Question 3:
Kennis Inzicht Toepassen x x 20 punten

Calculate the increase in inventory (in US Dollars) that DELL would have needed if it operated at Compaq’s Days Supply of Inventory (DSI) level. Give your opinion about the outcome. (Use the figures from 1995). (please show the full calculation and formula’s used)
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