42767890-dell-complete-report.ppt

FINANCIAL STATEMENT ANALYSIS OF DELL INC.

GROUP MEMBERS

Sabir Ayub

Tariq Hayat

Syed Ikram ullah shah

Syed Waqas

Hameed Gul

Nizam Hanif

Zeeshan

DELL Head office at Toronto

The World Youngest CEO for EVER

Company: Public CompanyIncorporated: 1984 as Dell Computer CorporationEmployees: 96,000Sales: $52.91 billion (2010)Stock Exchanges: NASDAQTicker Symbol: DELLNAIC: 334111 Electronic Computer Manufacturing; 334112 Computer Storage Device Manufacturing; 334119 Other Computer Peripheral Equipment Manufacturing; 454110 Electronic Shopping and Mail-Order Houses

Introduction of Dell Company

Background and origins

Founded in 1984 with a capital of 1000 dollars.1985 produced first computer of its own design.Changed its name to Dell Computer Corporation in 1988.In 1987 started the first international operations.In 1992, included in Forbes 500 list.In 1996, Dell started selling through website.1999, Dell overtook Compaq to become the largest seller of PC’s in US.In 2002, introduced Dell brand printers.In 2003, changed its named to Dell, Inc.In 2004, Michael Dell stepped down as CEO and Kevin Rollins was asked to take his seat.

Principal Operating Units

Dell Americas

Dell Asia Pacific Japan;

Dell Europe

Middle East

Africa

Early History

Dell was founded by Michael Dell, who started selling personal computers out of his dorm room as a freshman at the University of Texas in Austin. Dell bought parts wholesale, assembled them into clones of IBM computers, and sold them by mail order to customers who did not want to pay the higher prices charged by computer stores. The scheme was an instant success. He was soon grossing $80,000 a month, and in 1984 he dropped out of school, incorporating his business as Dell Computer Corporation (though it would initially do business as PC's Limited).

At the time, the PC industry was dominated by such large firms as IBM, while smaller, lesser known mail-order firms sold IBM clones at a steep discount. Dell used low-cost direct marketing to undersell the better known computers being sold through such high-overhead dealer networks. Dell placed ads in computer magazines, gearing his merchandise to buyers who were sophisticated enough to recognize high-quality merchandise at low prices. Customers placed orders to Dell by dialing a toll-free number. As a result of these methods, Dell's computers became the top brand name in the direct-mail market.

Early History

Dell achieved sales of $6 million its first full year in business, approaching $40 million the next year. Dell hired former investment banker E. Lee Walker as president in 1986 to help deal with his firm's explosive growth. By 1987 Dell held a dominant position in the mail-order market, but it was clear that the firm had to move beyond mail order if it was to continue growing. To accomplish this goal the firm needed a larger professional management staff, and Dell hired a group of marketing executives from Tandy Corporation, another maker of low-cost PCs. The group built a sales force able to market to large corporations and put together a network of value-added resellers, who assembled packages of computer components to sell in specialized markets.

Regardless, the firm continued growing rapidly, opening a London office that sold $4 million worth of computers during one month in 1988. Dell also formed a Canadian subsidiary. Early in 1988 the firm formed various divisions to raise its profile among corporate, government, and educational buyers. With reported sales of $159 million in 1987, the firm went public in June 1988, selling 3.5 million shares at $8.50 a share.

Dell at Fortune 500

Rank Year Revenues Profit ($million) ($million)

33 2009 61,101 2,478

34 2008 61,133 2,947

34 2007 57,095 2,614

25 2006 55,908 3,572

Vision

It’s the way we do business. It's the way we interact with the community. It's the way we interpret the world around us-- our customers’ needs, the future of technology, and the global business climate. Whatever changes the future may bring our vision -- Dell Vision -- will be our guiding force.So Dell needs full customer satisfaction. In order to become the most successful computer company, they need the newest technology and loyal customers.

Mission

Dell's mission is to be the most successful Computer Company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet customer expectations of:

Highest quality Leading technology Competitive pricing Individual and company accountability Best-in-class service and support Flexible customization capability Superior corporate citizenship Financial stability

Objective

Dell's aim is to create loyal customers by providing superior experience at a great value. They are committed to direct relationships, providing best products with standard based technology outperforming the competition with value and a superior customer experience. Provide customers with superb value technology.

MAJOR ACHIEVEMENTS

Introduced fastest computer in 1986Introduced fastest computer in 1986

Its has lowest price among all other Its has lowest price among all other

Went to SPRING Comdex’s 86Went to SPRING Comdex’s 86

Expanding his business globallyExpanding his business globally

Open office in London in June 1987Open office in London in June 1987

Introduced in Li-ON battery in 1993Introduced in Li-ON battery in 1993

AMD mpu firstly used by DELLAMD mpu firstly used by DELL

www.dell.com is launched in June 1994www.dell.com is launched in June 1994

MAJOR SETBACKS

First setback experienced in year 1984 When huge stock of 256k memory chip become useless

OLYMPIC series got huge failure Potentially affected batteries were sold with Laptops in 2006

DELL PRODUCTS

Laptops and Minis

Desktop Computers

Printers and Ink

Televisions

Alien ware

Digital Cameras

Gaming PC and Console

GPS (vehicle, phone, outdoor)

DELL PRODUCTS

Handhelds & PhonesMemory (Dell memory, memory sticks, memory upgrades)Laptop accessories (cases, mice, keyboards, adapters, batteries, etc;)Mp3 playersNetworking (adapters, routers, wireless / wifi, etc)Software (Anti-Virus and security, Business and Office, Operating Systems, etc,)Desktop Accessories (Keyboard, speakers, headphones, headset, adapters etc)

Income Statement of Dell Inc. 2010 2009 2008 2007 2006

Operating Revenue 52,902 61,101 61,133 57,420 55,788

Cost of Revenue -42,789 -49,375 -48,855 -47,433 -45,503

Gross Operating Profit 10,113 11,726 12,278 9,987 10,285

Selling/General/Admin Expense -6,465 -7,102 -7,538 -5,948 -5,051

Research & Development -624 -663 -610 -498 -458

EBITDA 3,024 3,961 4,130 3,541 4,776

Depreciation & Amortization -852 -769 -607 -471 -394

Operating Income 2,172 3,192 3,523 3,070 4,382

Interest Income 57 180 496 368 308

Other Income, Net -45 47 -64 -48 -53

Total Income Avail For Interest Expense (EBIT) 2,184 3,417 3,872 3,390 4,637

Interest Expense -160 -93 -45 -45 -29

Pre-Tax Income 2,024 3,324 3,827 3,345 4,608

Income Taxes -591 -846 -880 -762 -1,006

Total Net Income 1,433 2,478 2,947 2,583 3,602

Balance Sheet Dell Inc.

Assets in Millions of Dollars

2010 2009 2008 2007 2006

Cash and Equivalents 10,635 8,352 7,764 9,546 7,054

Marketable Securities 373 740 08 752 2,016

Receivables 8,543 6,443 7,693 6,152 5,448

Inventories 1,051 867 1,180 660 588

Other Current Assets 3,643 3,749 3,035 2,829 2,688

Total Current Assets 24,245 20,151 19,880 19,939 17,794

Net Fixed Assets 2,181 2,277 2,668 2,409 1,993

Intangibles 1,694 724 780 - -

Cost in Excess 4,074 1,737 1,648 - -

Other Non-Current Assets 1,458 1,611 2,585 3,287 3,465

T. Non-Current Assets 9,407 6,349 7,681 5,696 5,458

Total Assets 33,652 26,500 27,561 25,635 23,252

Balance Sheet Dell Inc.

Liabilities & Equities in Millions of Dollars

2010 2009 2008 2007 2006

Accounts Payable 11,373 8,309 11,492 10,430 9,868

Short Term Debt 663 113 225 188 65

Accrued Liabilities 3,884 1,544 1,920 2,770 2,429

Deferred Revenues 3,040 2,649 2,486 2,032 1,842

Other Current Liabilities - 2,244 2,403 2,371 1,969

Total Current Liabilities 18,960 14,859 18,526 17,791 16,173

Long Term Debt 3,417 1,898 362 569 625

Other Non-Current Liabilities 5,634 5,472 4,938 2,947 2,407

Total Non-Current Liabilities 9,051 7,370 5,300 3,516 3,032

Total Liabilities 28,011 22,229 23,826 21,307 19,205Common Shareholder's Equity 5,641 4,271 3,735 4,328 4,047

Total Liabilities & Shareholder's Equity

33,652 26,500 27,561 25,635 23,252

INCOME STATEMENT (Horizontal Analysis)

2010 % 2009 % 2008 % 2007 % 2006 %

Operating Revenue 52,902 95 61,101 110 61,133 110 57,420 103 55,788 100%

Cost of Revenue -42,789 94 -49,375 109 -48,855 107 -47,433 104 -45,503 100%

Gross Operating ProfitGross Operating Profit 10,11310,113 9898 11,72611,726 114114 12,27812,278 119119 9,9879,987 9797 10,28510,285 100%100%

Selling/General/Admin Expense -6,465 128 -7,102 141 -7,538 149 -5,948 118 -5,051 100%

Research & Development -624 136 -663 145 -610 133 -498 109 -458 100%

EBITDA 3,024 63 3,961 83 4,130 86 3,541 74 4,776 100%

Depreciation & Amortization -852 216 -769 195 -607 154 -471 120 -394 100%

Operating Income 2,172 50 3,192 73 3,523 80 3,070 70 4,382 100%

Interest Income 57 19 180 58 496 161 368 119 308 100%

Other Income, Net -45 85 47 -89 -64 121 -48 91 -53 100%

(EBIT) 2,184 47 3,417 74 3,872 84 3,390 73 4,637 100%

Interest Expense -160 552 -93 321 -45 155 -45 155 -29 100%

Pre-Tax Income 2,024 44 3,324 72 3,827 83 3,345 73 4,608 100%

Income Taxes -591 59 -846 84 -880 87 -762 76 -1,006 100%

Total Net Income 1,433 40 2,478 69 2,947 82 2,583 72 3,602 100%

Balance Sheet Horizontal Analysis

Assets 2010 % 2009 % 2008 % 2007 % 2006 %

Cash and Equivalents 10,635 151 8,352 118 7,764 110 9,546 135 7,054 100

Marketable Securities 373 19 740 37 208 10 752 37 2,016 100

Receivables 8,543 157 6,443 118 7,693 141 6,152 113 5,448 100

Inventories 1,051 179 867 147 1,180 201 660 112 588 100

Other Current Assets 3,643 136 3,749 139 3,035 113 2,829 105 2,688 100

Total Current Assets 24,245 136 20,151 113 19,880 112 19,939 112 17,794 100

Net Fixed Assets 2,181 109 2,277 114 2,668 134 2,409 121 1,993 100

Intangibles 1,694 724 780 - -

Cost in Excess 4,074 1,737 1,648 - -

Other Non-Current Assets 1,458 42 1,611 46 2,585 75 3,287 95 3,465 100

T. Non-Current Assets 9,407 172 6,349 116 7,681 141 5,696 104 5,458 100

Total Assets 33,652 145 26,500 114 27,561 119 25,635 110 23,252 100

Balance Sheet Horizontal Analysis

Liabilities 2010 % 2009 % 2008 % 2007 % 2006 %

Accounts Payable 11,373 115 8,309 84 11,492 116 10,430 106 9,868 100

Short Term Debt 663 1020 113 174 225 346 188 289 65 100

Accrued Liabilities 3,884 160 1,544 64 1,920 79 2,770 114 2,429 100

Deferred Revenues 3,040 165 2,649 144 2,486 135 2,032 110 1,842 100

Other Current Liabilities - 2,244 114 2,403 122 2,371 120 1,969 100

Total Current Liabilities 18,960 117 14,859 92 18,526 115 17,791 110 16,73 100

Long Term Debt 3,417 547 1,898 304 362 58 569 91 625 100

Other Non-Current Liabilities 5,634 234 5,472 227 4,938 205 2,947 122 2,407 100

Total Non-Current Liabilities 9,051 299 7,370 243 5,300 175 3,516 116 3,032 100

Total Liabilities 28,011 146 22,229 116 23,826 124 21,307 111 19,205 100

Common Shareholder's Equity 5,641 139 4,271 106 3,735 92 4,328 107 4,047 100

Total Liabilities & Shareholder's Equity 33,652 145 26,500 114 27,561 119 25,635 110 23,252 100

INCOME STATEMENT (Trend Analysis)

2010 % 2009 % 2008 % 2007 % 2,006 %

Operating Revenue 52,902 87 61,101 100 61,133 106 57,420 103 55,788 100

Cost of Revenue -42,789 87 -49,375 101 -48,855 103 -47,433 104 -45,503 100

Gross Profit 10,113 86 11,726 96 12,278 123 9,987 97 10,285 100

S.G&A Expenses -6,465 91 -7,102 94 -7,538 127 -5,948 118 -5,051 100

Research & Development -624 94 -663 109 -610 122 -498 109 -458 100

EBITDA 3,024 76 3,961 96 4,130 117 3,541 74 4,776 100

Dep. & Amortization -852 111 -769 127 -607 129 -471 120 -394 100

Operating Income 2,172 68 3,192 91 3,523 115 3,070 70 4,382 100

Interest Income 57 32 180 36 496 135 368 119 308 100

Other Income, Net -45 -96 47 -73 -64 133 -48 91 -53 100

EBIT 2,184 64 3,417 88 3,872 114 3,390 73 4,637 100

Interest Expense -160 172 -93 207 -45 100 -45 155 -29 100

Pre-Tax Income 2,024 61 3,324 87 3,827 114 3,345 73 4,608 100

Income Taxes -591 70 -846 96 -880 115 -762 76 -1,006 100

Total Net Income 1,433 58 2,478 84 2,947 114 2,583 72 3,602 100

Balance Sheet (Trend Analysis)Assets 2010 % 2009 % 2008 % 2007 % 2,006 %

Cash & Equivalents 10,635 127 8,352 108 7,764 81 9,546 135 7,054 100

Marketable Securities 373 50 740 356 208 28 752 37 2,016 100

Receivables 8,543 133 6,443 84 7,693 125 6,152 113 5,448 100

Inventories 1,051 121 867 73 1,180 179 660 112 588 100

Other Current Assets 3,643 97 3,749 124 3,035 107 2,829 105 2,688 100

Total Current Assets 24,245 120 20,151 101 19,880 100 19,939 112 17,794 100

Net Fixed Assets 2,181 96 2,277 85 2,668 111 2,409 121 1,993 100

Intangibles 1,694 234 724 93 780 - -

Cost in Excess 4,074 235 1,737 105 1,648 - -

Other Non-Current Assets 1,458 91 1,611 62 2,585 79 3,287 95 3,465 100

T. Non-Current Assets 9,407 148 6,349 83 7,681 135 5,696 104 5,458 100

Total Assets 33,652 127 26,500 96 27,561 108 25,635 110 23,252 100

Balance Sheet (Trend Analysis)Liabilities 2010 % 2009 % 2008 % 2007 % 2006 %

Accounts Payable 11,373 137 8,309 72 11,492 110 10,430 106 9,868 100

Short Term Debt 663 587 113 50 225 120 188 289 65 100

Accrued Liabilities 3,884 252 1,544 80 1,920 69 2,770 114 2,429 100

Deferred Revenues 3,040 115 2,649 107 2,486 122 2,032 110 1,842 100

Other Current Liabilities - 2,244 93 2,403 101 2,371 120 1,969 100

Total Current Liabilities 18,960 128 14,859 80 18,526 104 17,791 110 16,173 100

Long Term Debt 3,417 180 1,898 524 362 64 569 91 625 100

Other Non-Current Liabilities 5,634 103 5,472 111 4,938 168 2,947 122 2,407 100

Total Non-Current Liabilities 9,051 123 7,370 139 5,300 151 3,516 116 3,032 100

Total Liabilities 28,011 126 22,229 93 23,826 112 21,307 111 19,205 100

Common Shareholder's Equity 5,641 132 4,271 114 3,735 86 4,328 107 4,047 100

Total Liabilities & Shareholder's Equity 33,652 127 26,500 96 27,561 108 25,635 110 23,252 100

Working Capital = Current Assets - Current Liabilities

Years C. Assets C. Liabilities W. Capital

For 2006 17794 16173 1621

For 2007 19939 17791 2148

For 2008 19880 18526 1354

For 2009 20151 14859 5292

For 2010 24245 18960 5285

Working Capital = Current Assets - Current Liabilities

1621

2148

1354

5292 5285

0

1000

2000

3000

4000

5000

6000

For 2006 For 2007 For 2008 For 2009 For 2010

Working Capital

Current Ratio = Current Assets / Current Liabilities

Years C. Assets C. Liabilities C. Ratio

For 2006 17794 16173 1.10

For 2007 19939 17791 1.12

For 2008 19880 18526 1.07

For 2009 20151 14859 1.36

For 2010 24245 18960 1.28

Current Ratio = Current Assets / Current Liabilities

1.10 1.12 1.07

1.361.28

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60


Current Ratio

Acid Test Ratio = Cash Equaliant + Marketable Securities / Current Liabilities

Years C. Equaliant Market.

Securities Net A/C Rec. Current Liabilities Acid Test Ratio

For 2006 7054 2016 5448 16173 0.90

For 2007 9546 752 6152 17791 0.92

For 2008 7764 208 1693 18526 0.52

For 2009 8352 740 6443 14859 1.05

For 2010 10635 373 8543 18960 1.03

Acid Test Ratio = Cash Equaliant + Marketable Securities / Current Liabilities

0.90 0.92

0.52

1.05 1.03

0.00

0.20

0.40

0.60

0.80

1.00

1.20


Debt Ratio = Total Liabilities / Total Assets

Years T. Liabilities T. Assets Debt Ratio

For 2006 19205 23252 0.83

For 2007 21307 25635 0.83

For 2008 23826 27561 0.86

For 2009 22229 26500 0.84

For 2010 28011 33652 0.83

Debt Ratio = Total Liabilities / Total Assets

0.83

0.83

0.86

0.84

0.83

0.80

0.81

0.82

0.83

0.84

0.85

0.86

0.87


Debt To Equity Ratio = Total Liabilities / Stockholder's Equity

Years T. LiabilitiesShareholder's

EquityDebt to

equity Ratio

For 2006 19205 4047 4.75

For 2007 21307 4328 4.92

For 2008 23826 3735 6.38

For 2009 22229 4271 5.20

For 2010 28011 5641 4.97

Debt To Equity Ratio = Total Liabilities / Stockholder's Equity

4.75 4.92

6.38

5.204.97

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00


Inventory Turnover = CG/Avg. Inventory

Years C.G.SAvg. Inventory

Invent Turnover Days

For 06-07 47483 624 76.09 4.80

For 07-08 48855 920 53.10 6.87

For 08-09 49375 1023.5 48.24 7.57

For 09-10 42789 959 44.62 8.18

Inventory Turnover = CG/Avg. Inventory

4.80

6.87

7.578.18

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

For 06-07 For 07-08 For 08-09 For 09-10

Account Receivable Turnover = Net sales / Avg. Receivable

Years Net SalesAvg.

Receivable A/R. Turnover Days

For 06-07 57420 5800 9.90 36.8687

For 07-08 61133 6922.5 8.83 41.3314

For 08-09 61101 7068 8.64 42.2222

For 09-10 52902 7495.5 7.06 51.7156

Account Receivable Turnover = Net sales / Avg. Receivable

36.8687

41.3314 42.2222

51.7156

0.0000

10.0000

20.0000

30.0000

40.0000

50.0000

60.0000

For 06-07 For 07-08 For 08-09 For 09-10

Return on Assets = Net Income / Avg. Total Assets

Years Net IncomeAvg. Total

AssetsReturn on

Assets

For 06-07 2583 24443.500 0.106

For 07-08 2947 26598.000 0.111

For 08-09 2478 27030.500 0.092

For 09-10 1433 30076.000 0.048

Return on Assets = Net Income / Avg. Total Assets

0.1060.111

0.092

0.048

0.000

0.020

0.040

0.060

0.080

0.100

0.120

For 06-07 For 07-08 For 08-09 For 09-10

Net Profit Margin = Net Income / Net Sale X 100

Years Net Income Net Sales Profit Margin

For 2006 3602 55788 6.457

For 2007 2583 57420 4.498

For 2008 2947 61133 4.821

For 2009 2478 61101 4.056

For 2010 1433 52902 2.709

Net Profit Margin = Net Income / Net Sale X 100

6.457

4.4984.821

4.056

2.709

0.000

1.000

2.000

3.000

4.000

5.000

6.000

7.000


Gross Profit Margin = Gross Profit / Net sales x 100

YearsGross

Profit Net salesGross Profit

Margin

For 2006 10285 55788 18.436

For 2007 9987 57420 17.393

For 2008 12278 61133 20.084

For 2009 11726 61101 19.191

For 2010 10113 52902 19.116

Gross Profit Margin = Gross Profit / Net sales x 100

18.436

17.393

20.084

19.191 19.116

16.000

16.500

17.000

17.500

18.000

18.500

19.000

19.500

20.000

20.500


Operating Income Margin = Operating Income / Net sales x 100

YearsOperating

Income Net salesOperating

Income Margin

For 2006 4382 55788 7.85

For 2007 3070 57420 5.34

For 2008 3523 61133 5.76

For 2009 3192 61101 5.22

For 2010 2172 52902 4.10

Operating Income Margin = Operating Income / Net sales x 100

7.855

5.3475.763

5.224

4.106

0.000

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000


42767890-dell-complete-report.ppt

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