Questions 1)Assuming Depreciation 1996 , prepare Dell?s following financial data in 1996: a)Cash Flow Statement b)Sources &
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Questions
- 1)Assuming Depreciation1996, prepare Dell?s following financial data in 1996:
- a)Cash Flow Statement
- b)Sources & Uses Table.
- c)Explain how Dell financed its growth in 1996.
- 2)Using the data provided in Table A, Exhibit 4 & 5, calculate the increase in:
- a)InventoryDellwouldhaveneeded
- b)The obsolescence loss it would incur if it operated at Compaq?s DSI levels in 1995 (Hint: ).
- 3)Compare the Cash Conversion Cycles of Dell in 1995 and 1996.
- a)How did it change and why?
- b)Was Dell successful in reflecting its focus on Liquidity? (Hint: Use the balance of that year only instead of average balances, as 1994 numbers for Acc. Payable is not available)
- 4)Prepare the proforma Balance Sheet and Income Statement for the targeted 50% increase in 1997 Sales. Analyze if Dell can finance this fast growth internally without raising Long-term Debt or Equity. (Hint: Assume Profit Margins and Turnover Days will not change, Depreciation is again zero and no Dividends will be distributed).
- 5AssumingtheMinimumrequiredCash&S-TermInvestmentsofDellis$200mio,calculatethemaximumamountofDividendsDellcandistributein1997fromitsinternalsources.
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