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    Dell's Working Capital Case

    Uploaded by

    Ronak Kamdar
    Dell had strong annual worldwide sales growth compared to the PC industry from 1991 to 1996. Dell's sales grew 63% in 1991 compared to the industry decline of 2%, and Dell's sales grew 52% in 1995 compared to industry growth of 31%. Dell also had strong financial performance, with operating income growing from $67 million in 1992 to $377 million in 1996 and net profit growing from $51 million in 1992 to $272 million in 1996. Dell dominated the PC market by microprocessor, with 92% of Dell's systems using Intel microprocessors in 1994, declining to 35% using Intel in 1996 as other microprocessor options increased in popularity.

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    Dell's Working Capital Case

    Uploaded by

    Ronak Kamdar
    241 views3 pages
    Dell had strong annual worldwide sales growth compared to the PC industry from 1991 to 1996. Dell's sales grew 63% in 1991 compared to the industry decline of 2%, and Dell's sales grew 52% in 1995 compared to industry growth of 31%. Dell also had strong financial performance, with operating income growing from $67 million in 1992 to $377 million in 1996 and net profit growing from $51 million in 1992 to $272 million in 1996. Dell dominated the PC market by microprocessor, with 92% of Dell's systems using Intel microprocessors in 1994, declining to 35% using Intel in 1996 as other microprocessor options increased in popularity.

    Original Description:

    The document contains the exhibits of the case.

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    Dell had strong annual worldwide sales growth compared to the PC industry from 1991 to 1996. Dell's sales grew 63% in 1991 compared to the industry decline of 2%, and Dell's sales grew 52% in 1995 compared to industry growth of 31%. Dell also had strong financial performance, with operating income growing from $67 million in 1992 to $377 million in 1996 and net profit growing from $51 million in 1992 to $272 million in 1996. Dell dominated the PC market by microprocessor, with 92% of Dell's systems using Intel microprocessors in 1994, declining to 35% using Intel in 1996 as other microprocessor options increased in popularity.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    241 views3 pages

    Dell's Working Capital Case

    Uploaded by

    Ronak Kamdar
    Dell had strong annual worldwide sales growth compared to the PC industry from 1991 to 1996. Dell's sales grew 63% in 1991 compared to the industry decline of 2%, and Dell's sales grew 52% in 1995 compared to industry growth of 31%. Dell also had strong financial performance, with operating income growing from $67 million in 1992 to $377 million in 1996 and net profit growing from $51 million in 1992 to $272 million in 1996. Dell dominated the PC market by microprocessor, with 92% of Dell's systems using Intel microprocessors in 1994, declining to 35% using Intel in 1996 as other microprocessor options increased in popularity.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 3
    At a glance
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    The exhibits provide financial data and ratios for Dell and its competitors from 1991-1996, including sales, costs, profits, assets and liabilities.

    The exhibits discuss Dell's DSO, DPO, gross margin, operating expenses, operating income, net profit, sales growth compared to industry, and percentage of Dell systems sales by microprocessor from 1991-1996.

    From 1992-1996, Dell's annual sales grew significantly each year, from $890 million in 1992 to $5.296 billion in 1996. Dell's net profit was negative in 1993 but increased each subsequent year, from $51 million in 1992 to $272 million in 1996.

    Exhibit 1 Exhibit 2 Exhibit 3

    Dell's Annual worldwide Working Capital Financial Ratios for Dell % of Dell Systems Sales by
    sales dollar growth versus Microprocessor
    industry
    D
    Calendar CC Computer
    Dell' Industry S DSO DPO
    Year C Systems
    I
    1991 63% -2% Q193 ### 54 46 48 386 models
    1992 126% 7% Q293 ### 51 55 40 486 models
    Pentium
    1993 43% 15% Q393 ### 52 51 48 models

    1994 21% 37% Q493 ### 54 53 56

    1995 52% 31% Q194 ### 58 56 57

    Q294 ### 53 43 51
    Q394 ### 53 45 41
    Q494 ### 50 42 41
    Q195 ### 53 45 40
    Q295 ### 49 44 40
    Q395 ### 50 46 39
    Q495 ### 47 44 35
    Q196 ### 47 42 39
    Q296 ### 50 43 43
    Q396 ### 49 43 43
    Q496 ### 42 33 40
    Exhibit 4
    of Dell Systems Sales by P&L for Dell (Million of $)
    Microprocessor

    FY94 FY95 FY96 Fiscal Year 1996 1995 1994 1993 1992
    7% 0% 0% Sales $5,296 $3,475 $2,873 $2,014 $890
    92% 71% 25% Cost of Sales 4,229 2.737 2441 1565 608
    1% 29% 75% Gross Margin 1,067 738 433 449 282

    Operating 690 489 472 310 215


    Expenses
    Operating 377 249 -39 139 67
    Income
    Financing & 6 -36 0 4 7
    Other Income
    Income Taxes 111 64 -3 41 23
    Net Profit 272 149 -36 102 51
    Exhibit 5
    Balance Sheet for Dell (million of $)

    Year Ended
    January 28, January 29, January 30,
    1996 1995 1994
    Current Assets:

    Cash 55 43 3

    Short Term Investments 591 484 ' 334

    Accounts Receivables, net 726 538 411


    Inventories 429 293 220
    Other 156 112 80
    Total Current Assets 1,957 1,470 1,048
    Property, Plant & Equipment, net 179 117 87
    Other 12 7 5
    Total Assets 2,148 1,594 1,140
    Current Liabilities:
    Accounts Payable 466 403 NA
    Accrued and Other Liabilities 473 349 NA
    Total Current Liabilities 939 752 538
    Long Term Debt 113 113 100
    Other Liabilities 123 77 31
    Total Liabilities 1,175 942 669
    Stockholders' Equity:
    Preferred Stocka 6 120 NA
    Common Stocka 430 242 NA
    Retained Earnings 570 311 NA
    Other -33 -21 NA
    Total Stockholders' Equity 973 652 471
    2,148 1,594 1,140

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