Case 3-25 Analysis of liquidity and profitability measures of Dell Inc. [LO 3, 4, 6, 7]

[The following information applies to the questions displayed below.]

The following data (amounts in millions) are taken from the February 3, 2012, and January 28, 2011, comparative financial statements of Dell Inc., a direct marketer and distributor of personal computers (PCs) and PC-related products:

DELL INC. Consolidated Statements of Income
	Fiscal Year Ended
	February 3, 2012		January 28, 2011
Net revenue	$	62,071	$	61,494
Cost of net revenue		48,260		50,098
Gross margin		13,811		11,396
Operating expenses:
Selling, general, and administrative		8,524		7,302
Research, development, and engineering		856		661
Total operating expenses		9,380		7,963
Operating income		4,431		3,433
Interest and other, net		(191)		(83)
Income before income taxes		4,240		3,350
Income tax provision		748		715
Net income	$	3,492	$	2,635

DELL INC. Consolidated Statements of Financial Position
	February 3, 2012			January 28, 2011
Assets
Current assets:
Cash and cash equivalents	$	13,852		$	13,913
Short-term investments		966			452
Accounts receivable, net		6,476			6,493
Short-term financing receivables, net		3,327			3,643
Inventories, net		1,404			1,301
Other current assets		3,423			3,219
Total current assets		29,448			29,021
Property, plant, and equipment, net		2,124			1,953
Long-term investments		3,404			704
Long-term financing receivables, net		1,372			799
Goodwill		5,838			4,365
Purchased intangible assets, net		1,857			1,495
Other noncurrent assets		490			262
Total assets	$	44,533		$	38,599
Liabilities and Stockholders Equity
Current liabilities:
Short-term debt	$	2,867		$	851
Accounts payable		11,656			11,293
Accrued and other		3,934			4,181
Short-term deferred services revenue		3,544			3,158
Total current liabilities		22,001			19,483
Long-term debt		6,387			5,146
Long-term deferred services revenue		3,836			3,518
Other noncurrent liabilities		3,392			2,686
Total liabilities		35,616			30,833
Stockholders equity:
Common stock and capital in excess of $0.01 par value; shares authorized: 7,000; shares issued: 3,369 respectively;shares outstanding: 1,761 and 1,918, respectively		12,187			11,797
Treasury stock, at cost; 1,154 and 976 shares, respectively		(31,445)			(28,704)
Retained earnings		28,236			24,744
Accumulated other comprehensive loss		(61)			(71)
Total stockholders equity		8,917			7,766
Total liabilities and equity	$	44,533		$	38,599