Introduction Dell Computer Corporation continues to have successful growth due to its innovative “built to order” business model and customer service focus which includes direct selling. Dell’s ability to maintain low levels of finished goods inventory minimized the cash conversion cycle to a high extent‚ thus minimizing the need for costly working capital. In past years‚ Dell has mainly financed its operations internally and secondly through the issuance of shareholder equity and small amounts
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Dell’s Working Capital The Case: Dell Computers Corporation has been growing faster than its competitors. It has revolutionized the PC industry by providing customized laptops & notebooks to its customers in a few days at competitive prices. It did so by building computers after it received customer’s orders. This enabled Dell to swiftly roll out new products‚ maintain lower inventory & respond quickly to market needs. It generated more cash due to low cash conversion cycle. Low inventory coupled
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differentiates’ Dell from its competitors is that they built the computer systems after they received the order. Therefore‚ Dell’s work-in-process (WIP) and finished goods inventory remained low compared to industry leaders‚ such as‚ Compaq‚ Apple‚ and IBM. Dell maintained their inventory. They ordered parts and components based on sales forecasts. Many of their suppliers‚ who had warehouses near their Austin Texas and Ireland plants‚ often delivered parts on a daily basis. Dell issued “releases”
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Dell working capital case Dell’s build to order system created a very different balance sheet. We want to assess their competitive advantage in working capital at the time of the case‚ evaluate how they funded growth at the time (1996) and evaluate potential ways to fund projected sales growth of 50% in 1997 through use of internal funds. 1. Calculate their working capital advantage. To do this calculate days sales of inventory‚ payable days and receivables days to find their cash conversion
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Brief Outline This case is regarding Dell computers financial status in the period from 1991 to 1995. In this analysis we intend to highlight the various issues related to working capital experienced by the company. What makes this case interesting is the turnaround of Dell’s financial structure which in turn led to its recovery from seemingly major liquidity issues. To give a brief outline‚ this study enlightens one on how a fast growing company can get into trouble due to mismanagement of cash
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how Dell’s working capital policy is a competitive advantage for the company? Dell uses a just in time order fulfillment policy and accurate forecasting of sales to minimize inventories. This allowed Dell to hold inventory of finished products far below levels of their competitors (10-20% compared to 50-70% industry level) and furthermore allowed them to quickly implement changes to their product lines as new technologies became available. This quick inventory turnover also allowed Dell to retain
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School of Business‚ Galgotias University‚ Greater Noida. I was provided opportunity to undergo training at the Jammu and Kashmir Bank Ltd.‚ Agra‚ my project topic is “ASSESSMENT OF WORKING CAPITAL FINANCE AT JAMMU AND KASHMIR BANK LTD” This project has been of great help in providing me an insight into the real life working of an organization. It gave me a chance to apply‚ all I had learned to practical situations‚ enhancing my understanding and image of the market and business world. This experience
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PGDIB SUMMER PROJECT 2006-2008 “Working Capital Financing to SMEs” AT The Hong Kong and Shanghai Banking Corporation Limited TABLE OF CONTENT INDEX TO CONTENTS PAGE NO. 1. Executive Summary 1 2. Introduction 2 3. Review of literature
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World Applied Sciences Journal 12 (11): 1967-1973‚ 2011 ISSN 1818-4952 © IDOSI Publications‚ 2011 Practices of Working Capital Policy and Performance Assessment Financial Ratios and Their Relationship with Organization Performance 1 1 Ghulam Shabbir Khan Niazi‚ 2Ahmed Imran Hunjra‚ 3Majid Rashid‚ 4 Syed Waqar Akbar and 5Muhammad Naeem Akhtar Quaid-I-Azam‚ School of Management Sciences‚ Quaid-I-Azam University Islamabad‚ Pakistan 2 Scholar Iqra University Islamabad‚ Pakistan 3
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Q1: How was Dell’s working capital policy a competitive advantage? Dell had a policy of working with low inventory and it used to make inventory purchases based on the sale orders received. This led to following advantages: No obsolete goods. Defects in raw material manufacturers were easily weeded out. New technological up gradations can be easily set into the system before the competition turns over the existing inventory. Thus Dell had a first mover’s advantage in being abreast with latest
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