1. Prepare vertical (common size) statements for the balance sheets (4 years) and income statements (5 years) in the tabs below. Use Excel formulas to make your calculations and round your answer cells to 3 decimal places. Use total assets on the balance sheet and net revenue on the income statement for each year as the denominator of your calculations. 2. After completing your calculations in #1, compare the years and note any unusual changes that occurred over the periods. Very small changes are not likely unusual, but even small changes every year can indicate a trend. After analyzing each line item on the two statements, write a memo listing any items you think need further investigation and discuss possible errors or manipulations that might be occurring. List any related accounts that might need investigation. Use the MEMO tab to write your analysis. A B C D E 1 DELL INC. 2 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 3 (in millions) 4 5 6 7 8 9 Current assets: 10 Cash and cash equivalents 11. Short-term investments 12 Accounts receivable, net Inventories 13 Other 14 15 16 Property, plant and equipment, 17 net 18 Investments 19 Other non-current assets 20 21 22 Total current assets. Total assets F January 31, 2003 LL ASSETS $ 4,232 406 2,586 306 1,394 8,924 913 5,267 366 $ 15,470 G H $ S February 1, 2002 3,641 273 2,269 278 1,416 7,877 826 4,373 459 13,535) +3 M N DELL INC. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions) ASSETS Current assets: Cash and cash equivalents Short-term investments Accounts receivable, net Inventories Other Total current assets Property, plant, and equipment, net Investments Other non-current assets Total assets P January 28, 2005 4,747 5,060 4,414 459 2,217 16,897 1,691 4,319 308 $ 23,215 $ R S T January 30, 2004 $ 4,317 835 3,635 327 1,519) S 10,633 1,517 6,770 391 19,311 23 24 25 26 Current liabilities: 27 28 29 30 31 Long-term debt 32 Other 33 34 35 36 Stockholders' equity: 37 38 39 40 41 42 43 44 45 46 Accounts payable Accrued and other LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,989 2,944 8,933 506 1,158 10,597 6,018 (4,539) 3,486 Total current liabilities Total liabilities Preferred stock and capital in excess of S.01 par value; shares issued and outstanding: none Common stock and capital in excess of $.01 par value; shares authorized: 7,000; shares issued: 2,681 and 2,654, respectively Treasury stock, at cost; 102 and 52 shares, respectively Retained earnings Other comprehensive income Hol Other Total stockholders' equity liabilities and stockholders' equity (33) (59) 4,873 $ 15,470 5,075 2,444 7,519 520 802 8,841 5,605 (2,249) 1,364 38 (64) 4,694 S 13,535 M Investments Other non-current assets Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable Accrued and other Long-term debt Other non-current liabilities Stockholders' equity: 4,319 308 $ 23,215 $ 8,895 5,241 14,136 505 2,089 16,730 8,195 (10,758) 9,174 Total current liabilities. Total liabilities Preferred stock and capital in excess of $.01 par value; shares issued and outstanding: none Common stock and capital in excess of $.01 par value; shares authorized: 7,000; shares issued: 2,769 and 2,721, respectively Treasury stock, at cost; 284 and 165 shares, respectively Retained earnings Other comprehensive loss Other Total stockholders' equity Total liabilities and stockholders' equity $ (82) (44) 6,485 23,215 $ $ 6,770 391 19,311 7,316 3,580 10,896 505 1,630 13,031 6,823 (6,539) 6,131 (83) (52) 6,280 $ 19,311 1. Prepare vertical (common size) statements for the balance sheets (4 years) and income statements (5 years) in the tabs below. Use Excel formulas to make your calculations and round your answer cells to 3 decimal places. Use total assets on the balance sheet and net revenue on the income statement for each year as the denominator of your calculations. 2. After completing your calculations in #1, compare the years and note any unusual changes that occurred over the periods. Very small changes are not likely unusual, but even small changes every year can indicate a trend. After analyzing each line item on the two statements, write a memo listing any items you think need further investigation and discuss possible errors or manipulations that might be occurring. List any related accounts that might need investigation. Use the MEMO tab to write your analysis. A B C D E 1 DELL INC. 2 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 3 (in millions) 4 5 6 7 8 9 Current assets: 10 Cash and cash equivalents 11. Short-term investments 12 Accounts receivable, net Inventories 13 Other 14 15 16 Property, plant and equipment, 17 net 18 Investments 19 Other non-current assets 20 21 22 Total current assets. Total assets F January 31, 2003 LL ASSETS $ 4,232 406 2,586 306 1,394 8,924 913 5,267 366 $ 15,470 G H $ S February 1, 2002 3,641 273 2,269 278 1,416 7,877 826 4,373 459 13,535) +3 M N DELL INC. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions) ASSETS Current assets: Cash and cash equivalents Short-term investments Accounts receivable, net Inventories Other Total current assets Property, plant, and equipment, net Investments Other non-current assets Total assets P January 28, 2005 4,747 5,060 4,414 459 2,217 16,897 1,691 4,319 308 $ 23,215 $ R S T January 30, 2004 $ 4,317 835 3,635 327 1,519) S 10,633 1,517 6,770 391 19,311 23 24 25 26 Current liabilities: 27 28 29 30 31 Long-term debt 32 Other 33 34 35 36 Stockholders' equity: 37 38 39 40 41 42 43 44 45 46 Accounts payable Accrued and other LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,989 2,944 8,933 506 1,158 10,597 6,018 (4,539) 3,486 Total current liabilities Total liabilities Preferred stock and capital in excess of S.01 par value; shares issued and outstanding: none Common stock and capital in excess of $.01 par value; shares authorized: 7,000; shares issued: 2,681 and 2,654, respectively Treasury stock, at cost; 102 and 52 shares, respectively Retained earnings Other comprehensive income Hol Other Total stockholders' equity liabilities and stockholders' equity (33) (59) 4,873 $ 15,470 5,075 2,444 7,519 520 802 8,841 5,605 (2,249) 1,364 38 (64) 4,694 S 13,535 M Investments Other non-current assets Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable Accrued and other Long-term debt Other non-current liabilities Stockholders' equity: 4,319 308 $ 23,215 $ 8,895 5,241 14,136 505 2,089 16,730 8,195 (10,758) 9,174 Total current liabilities. Total liabilities Preferred stock and capital in excess of $.01 par value; shares issued and outstanding: none Common stock and capital in excess of $.01 par value; shares authorized: 7,000; shares issued: 2,769 and 2,721, respectively Treasury stock, at cost; 284 and 165 shares, respectively Retained earnings Other comprehensive loss Other Total stockholders' equity Total liabilities and stockholders' equity $ (82) (44) 6,485 23,215 $ $ 6,770 391 19,311 7,316 3,580 10,896 505 1,630 13,031 6,823 (6,539) 6,131 (83) (52) 6,280 $ 19,311