Financial Statement Analysis Paper Example

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Financial Statement Analysis Paper
Example 1: Dell Computer Dell Inc.
Income Statement Revenue Cost of Goods Sold Gross Profit R&D Selling General & Administrative Non Recurring Others Operating Income Depreciation Expense Other Income/Expense EBIT Interest Expense Tax Expense Income from Cont Operations Net Income Balance Sheet Cash Short Term Investments Accounts Receivable Inventory Other Current Assets Total Current Assets Long Term Investments PP&E Net Goodwill Intangibles Other Assets Total Assets Current Year $ 61,494 49,128 12,366 661 7,302 0 0 4,403 970 116 3,549 199 715 2,635 2,635 Percent 100.0% 79.9% 20.1% 1.1% 11.9% 0.0% 0.0% 7.2% 1.6% 0.2% 5.8% 0.3% 1.2% 4.3% 4.3% Prior Year $ 52,902 42,789 10,113 624 6,465 0 0 3,024 852 12 2,184 160 591 1,433 1,433 Percent 100.0% 80.9% 19.1% 1.2% 12.2% 0.0% 0.0% 5.7% 1.6% 0.0% 4.1% 0.3% 1.1% 2.7% 2.7% 3 Years Ago $ 61,101 49,375 11,726 663 7,102 0 0 3,961 769 47 3,417 93 846 2,478 2,478 Percent 100.0% 80.8% 19.2% 1.1% 11.6% 0.0% 0.0% 6.5% 1.3% 0.1% 5.6% 0.2% 1.4% 4.1% 4.1%

13,913 452 10,136 1,301 3,219 29,021 1,503 1,953 4,365 1,495 262 38,599

36.0% 1.2% 26.3% 3.4% 8.3% 75.2% 3.9% 5.1% 11.3% 3.9% 0.7% 100.0%

10,635 373 8,543 1,051 3,643 24,245 1,113 2,181 4,074 1,694 345 33,652

31.6% 1.1% 25.4% 3.1% 10.8% 72.0% 3.3% 6.5% 12.1% 5.0% 1.0% 100.0%

8,352 740 6,443 867 3,749 20,151 954 2,277 1,737 724 657 26,500

31.5% 2.8% 24.3% 3.3% 14.1% 76.0% 3.6% 8.6% 6.6% 2.7% 2.5% 100.0%

Accounts Payable Short/Current L.T. Debt Other Current Liabilities Total Current Liabilities Long Term Debt Other Liabilities Minority Interest Total Liabilities Preferred Stock Common Stock Additional Paid In Capital Retained Earnings Treasury Stock (-) Other Equity Total Stockholders' Equity

15,474 851 3,158 19,483 5,146 6,204 0 30,833 0 11,797 0 24,744 28,704 -71 7,766

40.1% 2.2% 8.2% 50.5% 13.3% 16.1% 0.0% 79.9%

15,257 663 3,040 18,960 3,417 5,634 0 28,011 0 11,472 0 22,110 27,904 -37

45.3% 2.0% 9.0% 56.3% 10.2% 16.7% 0.0% 83.2%

12,045 113 2,701 14,859 1,898 5,472 0 22,229 0 11,189 0 20,677 -27,904 309

45.5% 0.4% 10.2% 56.1% 7.2% 20.6% 0.0% 83.9% 0.0% 42.2% 0.0% 78.0% -105.3% 1.2% 16.1%

20.1%

5,641

16.8%

4,271

RATIO ANALYSIS Growth Ratios Sales Growth Income Growth Asset Growth Activity Ratios Receivable Turnover Inventory Turnover Fixed Asset Turnover Profit Ratios Profit Margin Return on Assets Return on Equity Liquidity Ratios Current Ratio Quick Ratio Solvency Ratios Debt to Total Assets Times Interest Earned (Accrual)

16.2% 83.9% 14.7% 6.6 41.8 31.5 4.3% 7.3% 39.3% 1.49 1.42 0.80 17.83

-13.4% -42.2% 27.0% 7.1 44.6 24.3 2.7% 4.8% 28.9% 1.28 1.22 0.83 13.65

-0.1% -15.9% -3.8% 8.6 48.2 26.8 4.1% 9.2% 61.9% 1.36 1.30 0.84 36.74

Industry Measures Product Revenue Services Revenue Total Revenue

Jan-11 $ 50,002.0 $ 11,492.0 $ 61,494.0 81.31% 18.69% 100.00%

Jan-10 $ 43,697 $ 9,205 $ 52,902 82.60% 17.40% 100.00%

Jan-09 $ 52,337 $ 8,764 $ 61,101 85.66% 14.34% 100.00%

Revenues come from the sale of Dell’s products and services. Revenues increased a combined 16% from January 2010 to January 2011 primarily because of the recovery in the economy. The health of the economy is critical for the company because its products are not primary products; so during a recession, people will rather save money for food than buy a computer. This explains the big decline in revenues for the 2009 fiscal year (a 13.4% drop compared to the previous year). The increase in 2010 is also due to a change in business strategy. Dell is growing its enterprise solutions and services business which changed the revenue stream of the company. Services revenue has weighted more on total revenues year after year. It went from 14.3% of revenues in January 2009 to 18.7% of revenues in January 2011. Also, services revenue has been profitable with a 25% growth in 2010 and 5% growth in 2009. (Part 2, Item 7, Form 10-K, Dell Inc., January 2011) Cost of goods and services...
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