Ratios for Dell

Page 1 of 15

Ratios for Dell

By | April 2005
Page 1 of 15
Financial Ratios for Dell Inc.

Jose Gonzales

Finance 544—Finance for Managerial Decision Making

Kevin Boyle (FAC)

March 9, 2005

Abstract

Financial Ratios for Dell Inc.

Team D selected Dell Inc. as our company for the team project. Why was Dell chosen? Dell Inc. with annual revenue of $41.4 billion, is a premier provider of computing products and services. Because of its direct business model, Dell was the leading seller of computer systems worldwide and the number one seller in our customer segments in the United States during calendar year 2003. Michael Dell founded the company in 1984 on a simple concept of selling computer systems directly to customers. Using this technique, Dell could best understand customer needs and efficiently provide the most effective computing solutions to meet those needs. Dell's climb to market leadership is the result of a relentless focus on delivering the best customer experience by selling computer system and services directly to customers. Dell, a Delaware corporation, is based in Round Rock, Texas and conducts operations worldwide through wholly owned subsidiaries. The company's business strategy combines its direct customer model with a highly efficient manufacturing and supply chain management organization and an emphasis on standards-based technologies. This strategy enables Dell to provide customers with superior value high quality, relevant technology customized systems; superior service and support; and product and services that are easy to buy and sell. (Form 10K, 2004) A company with an annual revenue of $41.4 billion must be financially sound, right? The answer is…"not necessarily!" However, there are tools available that will help determine if our selected company is financially sound. Ratio analyses are those tools used to evaluate the performance of a business and identify potential problems. Financial Ratios

Financial ratio analysis can teach so much about Dell's accounts...