Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2. What financial advantages does Dells working capital policies and practices confer? You have information on the reduction in inventory dollars. Can you tell from

2. What financial advantages does Dells working capital policies and practices confer?

You have information on the reduction in inventory dollars. Can you tell from the balance sheets what Dell did with that money?

image text in transcribed

Exhibit 4 Profit & Loss Statements for Dell Computer Corporation (millions of dollars). 1994 1993 $2,873 $2,014 Fiscal Year 1996 1995 1992 Sales $5,296 $3,475 $890 Cost of Sales 229 2,737 2,440 565 608 Gross Margin 1,067 738 433 449 282 Operating Expenses 690 472 21 4B9 Operating Income (39) 377 249 39 67 Financing & Other Income 36 Income Taxes 41 Net Profit (36) 272 49 02 51 Source: Dell Computer Corporation Fiscal 1996 Annual Report. Exhibit 5 Balance Sheets for Dell Computer Corporation (millions of dollars). Year Ended January 28, January 29, January 30, 1996 1995 1994 Current Assets: Cash 43 Short Term Investments 334, 59 484 Accounts Receivables, net 726 538 41 293 220 nventories 429 Other 112 Total Current Assets 1,470 04B 1,957 Property, Plant & Equipment, net 179 11 87 Other Total Assets 2,148 1,594 1,140 Current Liabilities: Accounts Payable 403 NA 466 Accrued and Other Liabilities 473 Total Current Liabilities 939 752 538 Long Term Debt 113 113 100 Other Liabilities 23 Total Liabilities 1,175 669 942 Stockholders' Equity: Preferred Stocka 120 Common Stocka 242 430 Retained Earnings NA 570 Other 33 Total Stockholders' Equity 47 973 652 2,148 1,594 1,140 Source: Dell Computer Corporation Fiscal 1994-1996 Annual Reports. 3,190,000 shares of preferred stock converted to common stock in fiscal year1996

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Futures And Options Markets

Authors: John C. Hull

5th Edition

0131445650, 9780131445659

More Books

Students also viewed these Finance questions