Financial Accounting for Management Term Paper

  • Length: 12 pages
  • Subject: Business
  • Type: Term Paper
  • Paper: #45293063

Excerpt from Term Paper :

Financial Accounting for Management)

Dell Inc. is considered to be a multinational technology business that is in the process of developing, manufacturing, sells, and supporting personal computers and other computer- associated products. Founded in Round Rock, Texas, Dell services somewhere around 76,500 people all over the world as of 2012.

Dell had gone through their growth process during the 1980s and 1990s to turn into (for a time) the major seller of servers and PCs. As of 2008 it detained the second overall spot in computer-sales that were within the business slightly behind Hewlett-Packard. The business at present sells personal computers, data storage devices, network switches, servers, software, and computer peripherals. Dell furthermore do have a booming sells in HDTVs, cameras, printers, MP3 players and other microelectronics constructed by other constructors.

In 2008, Fortune magazine classified Dell as the 25th-largest business in the Fortune 500 list, 6th on its yearly "Top 20" list of the most-admired companies in the United States. In 2007 Dell ranking was somewhere around 34th and 8th correspondingly on the matching lists for the year. A 2009 periodical recognized Dell as one of 39 high-piece corporations in the S&P 500 which had steadily out-achieved the marketplace over the preceding 15 years. Dell has closed in at $14.12 per holder on December 11th, 2010.

Dell had started opening up plants in Penang, Malaysia in 1995, and then in other nations such as Xiamen, China in 1999. These accommodations are presently serving the Asian marketplace and assemble 95% of Dell notebooks. Dell Inc. has been in the process of investing a projected $60 million in a new engineering component in Chennai, India, to provision the deals of its produces in the Indian subcontinent. Indian-made produces will start bearing the "Made in India" mark. In 2008 the Chennai service had the objective of creating 400,000 desktop PCs, and plans to create notebook PCs and other merchandises in the second part of 2007.

Since then Dell has made the decision to start moving desktop and PowerEdge server that are manufacturing for the South American marketplace from the Eldorado do Sul plant unbolted in 1999, to a new-fangled plant that is located in Hortolandia, Brazil in 2007.

Overview

The company that is making major savings in its call center and growth units that is in India. Closer to home, the company made an abrupt decision to close up its Austin, Texas-based desktop PC engineering resource in 2008. It also closed customer care hubs that are located in Canada. In 2009 Dell made the choice to sell its plant in Poland to Foxconn Technology, a unit of Hon Hai, the world's major agreement electronics constructor, and contracted for engineering facilities with Foxconn.

Producing more than partial of its transactions from desktops and notebook PCs, Dell faces strong rivalry in the combining marketplace it shares with Hewlett-Packard, Acer, and Lenovo. The corporation's PC transactions are succeeding a business inclination that prefers mobile computers; Dell's notebook line, its main income producer, explanations for nearly a third of its transactions. The corporation also made supplementary labors to branch deals with high-end strategies (Grinnell, 2010). Dell's multimedia PC and gaming offerings comprise its XPS and Alienware lines. It debuted a luxury laptop named Adamo in 2009.

Far from PCs that are limited, the business also delivers storage devices, servers and networking equipment. As with its PCs, Dell's servers are principally Wintel expedients, nevertheless it backs forms of Linux from both Novell and Red Hat on hand-picked servers, also as the Solaris functioning structure. Dell's accommodation line comprises of its PowerVault methods and tactics from EMC that it resells. In 2008 Dell developed storage systems supplier Equal Logic for $1.4 billion. The acquisition prolonged Dell's contributions for midsized and small businesses. Its PowerConnect Ethernet buttons are furthermore intended at the SMB market.

In 2009 Dell started to launch a portfolio of about 15 various new products -- comprising workstations, storage systems, servers, and they also stated a third-party IT administration software -- designed at bringing down the price in business statistics centers (Foreman, 2011). The combined product line contests with the complete aids of its principal competitors in the enterprise marketplace, IBM and HP. Furthermore that year the business made its long-supposed admission into the smartphone marketplace, debuting a wireless handset called the Mini 3, which is founded on the Android mobile method software produced by Google. Dell will allocate the phone by means of the China Mobile, which has about 500 million subscribers, and Claro, a unit of America Movil that helps probably around 44 million clienteles in Brazil. It also bumped into a contract for AT&T to convey the telephone in the U.S. The Android software is becoming used by a lot of smartphone builders, comprising Electronics, Motorola, HTC, LG and Samsung Electronics.

The Founder

Though at the University of Texas at Austin, the founder began a computer company named PC's Limited in a room with the number residence hall that was 2713 of twenty-seven story Dobie Center. The business became prosperous enough that, with the assistance of an extra lend from his grandparents, Dell was able to just drop out of the university at the age of 19 to manage PC's Limited, and this organization would later turn into Dell Computer Business, then eventually Dell, Inc.

Over time, and in spite of a number of hindrances (counting laptops that became on fire in 1993, provisionally misplacing the customer marketplace to Gateway in the mid-1990s, and others), Dell endured the race to convert into the most moneymaking PC producer in the world, that had sales that were worth $50 billion and incomes of $3 billion in 2004 (Liu, 2008). As Dell extended its product line past computers, stockholders nominated to retitle the company Dell, Inc. In 2003.

On March 4, 2004, Dell gave up his position as the CEO of Dell but remained as chairman of the panel, while Kevin B. Rollins, who at the time was the president and COO, was nominated to become the president and CEO. Then On January 31, 2007, Dell came back as CEO, following Kevin Rollins (who quit previous in the day).

Financial Statement Analysis Paper

Example 1: Dell Computer

Dell Inc.

Current Year

Prior Year

3 Years

Ago

Income Statement

Percent

Percent

Percent

Revenue

61,494

52,902

61,101

Cost of Goods Sold

49,128

79.9%

42,789

80.9%

49,375

80.8%

Gross Profit

12,366

20.1%

10,113

19.1%

11,726

19.2%

R&D

1.1%

1.2%

1.1%

Selling General & Administrative

7,302

11.9%

6,465

12.2%

7,102

11.6%

Non-Recurring

0

0.0%

0

0.0%

0

0.0%

Others

0

0.0%

0

0.0%

0

0.0%

Operating Income

4,403

7.2%

3,024

5.7%

3,961

6.5%

Depreciation Expense

1.6%

1.6%

1.3%

Other Income/Expense

0.2%

12

0.0%

47

0.1%

EBIT

3,549

5.8%

2,184

4.1%

3,417

5.6%

Interest Expense

0.3%

0.3%

93

0.2%

Tax Expense

1.2%

1.1%

1.4%

Income from Cont Operations

2,635

4.3%

1,433

2.7%

2,478

4.1%

Net Income

2,635

4.3%

1,433

2.7%

2,478

4.1%

Balance Sheet

Cash

13,913

36.0%

10,635

31.6%

8,352

31.5%

Short-Term Investments

1.2%

1.1%

2.8%

Accounts Receivable

10,136

26.3%

8,543

25.4%

6,443

24.3%

Inventory

1,301

3.4%

1,051

3.1%

3.3%

Other Current Assets

3,219

8.3%

3,643

10.8%

3,749

14.1%

Total Current Assets

29,021

75.2%

24,245

72.0%

20,151

76.0%

Long-Term Investments

1,503

3.9%

1,113

3.3%

3.6%

PP&E Net

1,953

5.1%

2,181

6.5%

2,277

8.6%

Goodwill

4,365

11.3%

4,074

12.1%

1,737

6.6%

Intangibles

1,495

3.9%

1,694

5.0%

2.7%

Other Assets

0.7%

1.0%

2.5%

Total Assets

38,599

33,652

26,500

Accounts Payable

15,474

40.1%

15,257

45.3%

12,045

45.5%

Short/Current L.T. Debt

2.2%

2.0%

0.4%

Other Current Liabilities

3,158

8.2%

3,040

9.0%

2,701

10.2%

Total Current Liabilities

19,483

50.5%

18,960

56.3%

14,859

56.1%

Long-Term Debt

5,146

13.3%

3,417

10.2%

1,898

7.2%

Other Liabilities

6,204

16.1%

5,634

16.7%

5,472

20.6%

Minority Interest

0

0.0%

0

0.0%

0

0.0%

Total Liabilities

30,833

79.9%

28,011

83.2%

22,229

83.9%

Preferred Stock

0

0

0

0.0%

Common Stock

11,797

11,472

11,189

42.2%

Additional Paid In Capital

0

0

0

0.0%

Retained Earnings

24,744

22,110

20,677

78.0%

Treasury Stock (-)

28,704

27,904

-27,904

-105.3%

Other Equity

-71

-37

1.2%

Total Stockholders' Equity

7,766

20.1%

5,641

16.8%

4,271

16.1%

RATIO ANALYSIS

Growth Ratios

Sales Growth

16.2%

-13.4%

-0.1%

Income Growth

83.9%

-42.2%

-15.9%

Asset Growth

14.7%

27.0%

-3.8%

Activity Ratios

Receivable Turnover

6.6

7.1

8.6

Inventory Turnover

41.8

44.6

48.2

Fixed Asset Turnover

31.5

24.3

26.8

Profit Ratios

Profit Margin

4.3%

2.7%

4.1%

Return on Assets

7.3%

4.8%

9.2%

Return on Equity

39.3%

28.9%

61.9%

Liquidity Ratios

Current Ratio

1.49

1.28

1.36

Quick Ratio

1.42

1.22

1.30

Solvency Ratios

Debt to Total Assets

Times Interest Earned

(Accrual)

0.80

17.83

0.83

13.65

0.84

36.74

Industry

Measures

Jan-11

Jan-10

Jan-09

Product

Revenue

$50,002.0

81.31%

$43,697

82.60%

$52,337

85.66%

Services

Revenue

$11,492.0

18.69%

$9,205

17.40%

$8,764

14.34%

Total

Revenue

$61,494.0

$52,902

$61,101

Incomes normally are coming from the sale of Dell's services and products. Incomes augmented a joint 16% from January 2010 to January 2011 chiefly for the reason that the recovery in the economy. The well-being of the economy is precarious for the…

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