Dell Inc. Finacial Studies

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Dell Inc.
Financial Performance Studies

Au Wai Kan,

International American University
Submitted on this
1 of July in the year 2009
for the partial requirements of
the degree of

Master of Science in Management

“I hereby declare that this paper submitted in partial fulfillment of the Master of Science of Management degree is my own work and that all contributions from any other persons or sources are properly and duly cited. I further declare that it does not constitute any previous work whether published or otherwise. In making this declaration I understand and acknowledge any breaches of the declaration constitute academic misconduct, which may result in my expulsion from the program and/or exclusion from the award of the degree.”

Name of candidate: Au Wai Kan
Signature of candidate: Au Wai Kan
Date: 1 July 2009

Name of supervisor: Nagar Lai
Signature of supervisor: Nagar Lai
Date: 1 July 2009

This thesis will study the financial performance of Dell Incorporation. A comparative analyse studies of the financial performance of Dell Inc. and its major competitor: Apple Inc, Hewlett-Packard and Lenovo. Empirical studies are based on the secondary data to compare in according to the financial ratios of the firms. This thesis compares the financial performance of Dell Inc, Apple Inc, Hewlett-Packard, and Lenovo and has made recommendations to Dell Inc for improving the financial performance.

Key Words: Supply Chain Management, Financial Performance, Computer Manufacturing

Table of Contents
Table of Contentsiii
List of Figuresv
List of Tablesv
Chapter 1 Introduction1
1.1 Research Objectives1
1.2 The scope of the research1
1.3 Research Method2
1.4 Terminologies2
1.5 Structure3
Chapter 2 Literature review5
2.1 The computer manufacturing industry5
2.2 The Build-to-Order Model6
2.2.1 Gaining Competitive Advantage through BTO: The Computer Industry6
2.2.2 MTS vs. BTO Changed Competitive Advantage7
2.2.3 Flexibility7
2.2.4 Just-in-Time7
2.3 Financial analysis8
2.4 Theoretical framework9
2.4.1 The role of financial analysis in informational support9
2.4.2 Two main types of financial analysis9
2.1.2 The method and main objectives of financial analysis11
2.4.3 Sources of information for the analysis13
2.4.4 Basics of financial statements13
2.4.5 Assessment of financial performance16
2.4.6 Ratio analysis16
2.4.7 Liquidity measurements18
2.4.8 Profitability ratios20
2.4.9 Evaluation of efficiency23
2.4.10 Leverage ratios25
2.4.11 Limitations on using financial ratios28
2.5 Chapter Summary30
Chapter 3 Empirical study31
3.1 Background Information of Dell and its competitors31
3.1.1 Dell Inc.31
3.1.2 Apple, Inc.31
3.1.3 Hewlett-Packard33
3.1.4 Lenovo Group Limited35
3.2 The empirical study of Dell Inc and its major competitors35
3.3 Structure and changes in the financial reports37
3.4 Ratio Analysis39
3.5 Chapter Summary40
Chapter 4 Findings41
4.1 Structure and Changes in the financial reports41
4.1.1 Dell Inc.41
4.1.2 Apple Inc.43
4.1.3 Hewlett-Packard45
4.1.4 Lenovo Group Limited48
4.2 Financial Ratio51
4.2.1. Financial liquidity51
4.2.2 Profitability52
4.2.3.Activity Ratio53
4.2.4. Leverage Ratio55
4.3 Chapter Summary56
Chapter 5 Discussion and Conclusions57
5.1. Balance Sheet Quality57
5.2 Operating Efficiency57
5.3 Earning Quality58
5.4 Cash Flow Quality58
5.5 Summary of findings and discussions58
5.6 Conclusions59
5.7 Limitations60
5.8 Suggestions for Future Research60
List of Appendixes62
Appendixes A: Balance Sheets for Dell inc. and its competitors63
Appendixes B: Common Size Balance Sheets for Dell inc. and its competitors64
Appendixes C: Income Statements...
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