ACC 519: Dell Inc: What is the primary cause of the decline in ROE from 2012 to 2013
Dell Ratio Analysis Assignment
- What is the primary cause of the decline in ROE from 2012 to 2013? Drill down as far as you can with the analysis.
- What is more profitable: product sales or services?
- Do you have any concerns with Dell’s current ratio?
- If Dell could issue debt at a 5% coupon rate, could it increase its returns to shareholders by including more debt in its capital structure?
You must complete this assignment in excel!
|Fiscal Year Ended||Current assets:|
|Cash and cash equivalents||12,569||13,852||13,913|
|Net revenue:||Short-term investments||208||966||452|
|Products||44,744||49,906||50,002||Accounts receivable, net||6,629||6,476||6,493|
|Services, including software related||12,196||12,165||11,492||Short-term financing receivables, net||3213||3,327||3,643|
|Total net revenue||56,940||62,071||61,494||Inventories, net||1,382||1,404||1,301|
|Cost of net revenue:||Other current assets||3,967||3,423||3,219|
|Products||36,683||39,689||42,068||Total current assets||27,968||29,448||29,021|
|Services, including software related||8,071||8,571||8,030||Property, plant, and equipment, net||2126||2,124||1,953|
|Total cost of net revenue||44,754||48,260||50,098||Long-term investments||2,565||3,404||704|
|Gross margin||12,186||13,811||11,396||Long-term financing receivables, net||1,349||1,372||799|
|Selling, general, and administrative||8,102||8,524||7,302||Purchased intangible assets, net||3374||1,857||1,495|
|Research, development, and engineering||1072||856||661||Other non-current assets||854||490||262|
|Total operating expenses||9,174||9,380||7,963||Total assets||47,540||44,533||38,599|
|Interest expense and other, net||(171)||(191)||(83)||LIABILITIES AND STOCKHOLDERS EQUITY|
|Income before income taxes||2,841||4,240||3,350||Current liabilities:|
|Income tax provision||469||748||715||Short-term debt||3,843||2,867||851|
|Net income||2,372||3,492||2,635||Accounts payable||11,579||11,656||11,293|
|Earnings per share:||Accrued and other||3644||3,934||4,181|
|Basic||1.36||1.90||1.36||Short-term deferred services revenue||4,373||3,544||3,158|
|Diluted||1.35||1.88||1.35||Total current liabilities||23,439||22,001||19,483|
|Weighted-average shares outstanding:||Long-term debt||5,242||6,387||5,146|
|Basic||1,745||1,838||1,944||Long-term deferred services revenue||3971||3,836||3,518|
|Diluted||1,755||1,853||1,955||Other non-current liabilities||4,187||3,392||2,686|
|Commitments and contingencies (Note 10)|
|Common stock and capital in excess of $.01 par value; shares authorized: 7,000; shares issued: 3,390 and 3,369, respectively; shares outstanding: 1,761 and 1,918, respectively||12,554||12,187||11,797|
|Treasury stock at cost: 1,154 and 976 shares, respectively||(32,145)||(31,445)||(28,704)|
|Accumulated other comprehensive loss||(59)||(61)||(71)|
|Total Dell Stockholder’s Equity||10,680|
|Total stockholders equity||10,701||8,917||7,766|
|Total liabilities and stockholders equity||47,540||44,533||38,599|