Professional Documents
Culture Documents
History:
Dell’s origin is back to the year of 1984; Michael Dell started the company
while he was still a student at University of Texas at Austin at the time. Where
the beginning of his business was from his dorm-room, selling IBM PC-
compatible computers built from stock components. The following year after
foundation, Dell came out with their very first computer called the Turbo which
had an eight-megahertz processor that was advertised for its systems in national
computer magazines for sale directly to consumers. The company grossed more
than $73 million in its first year of trading. Michael Dell initiated his trading
through the idea of selling personal computer systems directly to customers.
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In 1988, the company changed its name from “PC’s Limited” to “Dell
Computer Corporation” and began to expend globally.
In 1996, Dell began its e-commerce through selling computers via its web
site, and in 2002, Dell started new product lines including televisions, handhelds,
digital audio players, and printers. Dell's first acquisition occurred in 1999 with the
purchase of ConvergeNet Technologies. In 2003, the company’s brand was
changed to "Dell Inc." in order to recognize the company's expansion beyond
computers. In 2006, Dell acquired Alienware, which introduced several new items
to Dell products. To prevent cross-market products, Dell continues to run
Alienware as a separate entity but still a wholly-owned subsidiary.
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DELL INC Officers and Directors1
Leadership Experience,
Founder, Chairman and CEO of Dell Industry Experience,
Knowledge of new and existing technologies, Dell’s industry and Dell’s
customers.
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“DELL INC Officers & Directors” http://www.dailyfinance.com/company/dell-
inc/dell/nas/key-executives
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Ronald G. Garriques- President, Divisional, Communication Solutions, and
total compensation: $ 8.05 million, Mr. Garriques focuses on bringing to
market connected computing products and services through new channels of
distribution, including telecommunications, cable, satellite and others.
Stephen J. Felice- President, Divisional, total compensation: $ 5.57 million,
Mr. Felice leads the Dell organization that creates and delivers specific
solutions and technology to more than 72 million small and medium-sized
businesses globally and is responsible for Dell’s portfolio of consumer
products, including desktops, notebooks, software and peripherals as well as
product design and sales.
Peter A. Altabef- President, Divisional, total compensation: $ 16.87 million,
joined Dell, after Dell’s acquisition of Perot Systems in November 2009, as
President of Services, Dell’s global IT services and business solutions unit
Bradley R. Anderson- Senior VP, Divisional, he is responsible for worldwide
engineering, design, development and marketing of Dell’s enterprise products,
including servers, networking and storage systems.
Jeffrey W. Clarke- Vice Chairman, Operations and Technology,
Divisional, he is responsible for worldwide engineering, design and
development of Dell’s business client products, including Dell OptiPlextm
Desktops, Latitude Notebooks and Precision Workstations, and production of
all company products worldwide.
Paul D. Bell- president, Divisional, he is responsible for leading the teams
that help governments, education, healthcare and other public organizations
make full use of information technology.
Andrew C. Esparza- Senior VP, Divisional, he is responsible for driving the
strategy and supporting initiatives to attract, motivate, develop, and retain
world-class talent in support of our business goals and objectives. He also
has responsibility for corporate security and corporate responsibility on a
worldwide basis.
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Steve Schuckenbrock- President, Divisional, he is leading the delivery of
innovative and globally consistent Dell solutions and services to the world’s
largest corporate IT users.
Products1
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Manufacturing:
Green initiatives:
Technical support:
Organization:
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of directors. The Dell Global Executive Management Committee sets strategic
directions.
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“DELL INC Officers & Directors” http://www.dailyfinance.com/company/dell-
inc/dell/nas/key-executives
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Marketing:
Competition:1
What set the company apart was not just its consumer-oriented focus but
also its allowance for people to customize their computers during the ordering
process. Because each computer was individually assembled, this was
possible. 2
The industries Where Dell Inc. is competing include the personal computers,
computer networking equipment, computer hardware, servers &
mainframes, workstations &thin clients, and finally routing & switching
equipments. Competing in different industries imposes many risks on
Dell Inc. where according to its goal Dell should be the leader in each
industry and it has to keep competing different competitors in
different industries.
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DELL INC Top Competitors http://www.dailyfinance.com/company/dell-inc/dell/nas/top-
competitors
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Dell Inc. (DELL) competitors http://finance.yahoo.com/q/co?s=dell
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DELL INC: Income Statement1
Year over year, Dell Inc. has seen revenues fall from $61.1B to $52.9B.
This along with an increase in the cost of goods sold expense has led to a
reduction in the bottom line from $2.5B to $1.4B.
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Dell Inc: Financial Statement
http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?
Symbol=DELL&lstStatement=Income&stmtView=Ann
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Gain (Loss) on Sale of Investments 14.0 -10.0 2.0
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DELL INC: balance sheet1
Although debt as a percent of total capital increased at Dell Inc. over the
last fiscal year to 41.97%, it is still in-line with the Computers and Peripherals
industry's norm. Additionally, there are enough liquid assets to satisfy current
obligations. Accounts Receivable are typical for the industry, with 51.56 days
worth of sales outstanding. Last, Dell Inc. is among the least efficient in its
industry at managing inventories and has been consistently getting worse. At the
most recent fiscal year end there were 8.04 days of this company's Cost of
Goods Sold tied up in Inventories.
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Dell Inc: Financial Statement
http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?
Symbol=DELL&lstStatement=Balance&stmtView=Ann
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Gross Property Plant and Equipment 4,614.0 4,510.0 4,652.0
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Other Non-Current Liabilities 2,164.0 2,472.0 2,605.0
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DELL INC: cash flow1
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Dell Inc: Financial Statement
http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?
Symbol=DELL&lstStatement=CashFlow&stmtView=Ann
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CASH FROM INVESTING -1,763.0 177.0 -3,809.0
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FINANCIAL RATIOS: (DELL Inc.):
A. Liquidity Ratios:
1. current Ratio= total current Assets / total current liabilities
Years 2008 2009 2010
Calculation 19,880 / 18,526 20,151 / 14,859 24,245.0 / 18,960
s
Results 1.07 times 1.36 times 1.28 times
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B. Activity Ratio:
1. Average collection period = (Accounts receivable / sales) * 360
Years 2008 2009 2010
Calculation (7,693 / 61,133 )* (6,443 / 61,101 )* (8,543 / 52,902 )*
s 360 360 360
Results 45 days 38 days 58 days
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where both ratios should increase that they are measuring the company’s
efficiency to generate sales through making use of its assets and inventory.
C. Leverage Ratios
1. Debt to total assets = total debts / total assets
Years 2008 2009 2010
Calculation 562 / 27,561 1,898 / 26,500 3,417 / 33,652
s
Results 2.04 % 7.16 % 10.15 %
The leverage ratios are to measure the company’s ability to meet its
financial obligations or in other words it is the company's methods of
financing, through indicating the extent to which the company relies on debt
as a source of financing.
Dell Inc. financing through debt has been increasing since 2008 until it
reached 60% of its equity financed through debt, which has a critical
outcomes on the risk and return of its shares.
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D. Profitability Ratios:
The profitability ratios assess a company’s ability to generate earnings as
compared to its expenses and other relevant costs incurred during a specific
period of time. For most of these ratios, having a higher value compared to a
competitor's ratio or the same ratio from a previous period is indicative that the
company is doing well.
Dell’s Gross profit margin ratio shows a decrease in its ability to sell its products
with a price more than the cost of producing this product
The operating profit margin ratio reveals a decrease on how much dell Inc. earns
before interest and taxes from each dollar of sales.
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The net profit margin ratio shows the fraction of each dollar in revenue that is
available for equity holders after Dell Inc. pays its expenses plus interest and tax.
In 2010, the net profit margin indicates a major decrease almost the half of
revenues available for the shareholders.
The return on assets ratio expresses the firm’s net income as a return on the
book value of its assets; in 2010 the ROA decreased with a remarkable fraction
might be due to management’s inefficient use of its assets to generate earnings.
The return on equity ratio expresses the firm’s net income as a return on the book
value of its equity, also in 2010 the ROE decreased with a remarkable fraction,
this is might be due to decrease amount of money invested by shareholders.
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E. Valuation Ratios:
The Valuation ratios estimate the attractiveness of a potential or existing
investment and get an idea of its valuation.
The market capitalization ratio calculate the total market value of a firm’s equity,
in 2009 there was a huge decrease in the market capitalization, then it increase
by a fair amount in 2010, the reason behind those changes might be due to the
change in the share prices over the three years.
The price earnings ratio measures the value of equity to the firm’s earnings, after
analyzing the P/E ratio, a decrease and increase could be noticed due to the
changes in the market capitalization.
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Dell Inc: Financial Statement
http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?
Symbol=DELL&lstStatement=Balance&stmtView=Ann
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3. Market-to-Book Ratios= market value of equity / book value of equity
Years 2008 2009 2010
Calculations 40,994 / 3735 18,468 / 4271 26,517.35 / 5641
Results 11 4.3 4.7
This ratio is used to evaluate the firm; it indicates the value of the firm’s assets
when put to use where it must exceeds the historical costs of those assets. This
ratio provides a feedback on the market’s assessment of the management’s
decisions. Evaluating Dell’s book value to its market value we could observe the
decline from year 2008 to 2009 with a large amount, this might be caused by the
decrease of the amount of shareholders’ capital invested. Then in 2010 the
market-to-book ratio increased by 0.4.
The enterprise value to EBITDA assess the value of the underlying Dell’s assets,
unencumbered by debt and separate from any cash and marketable securities,
where the enterprise value of dell decreased from year 2008 to year 2009, then a
slight increase in 2010.
The net income represents the total earnings of the firm’s equity holders, where
the earning per share (EPS) provides a general idea about the net income
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available for shareholders. Dell EPS for 2009 decreased compared to 2008, while
in 2010 it continued to decrease but with a huge fraction.
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Historical prices: 1
Prices
Date Open High Low Close Average Volume
Jan 31, 2008 20.12 21.18 18.87 19.90 34,829,400
Mar 3, 2008 19.84 20.81 18.91 19.92 25,594,400
Jun 2, 2008 22.99 24.66 21.87 21.88 30,084,700
Sep 2, 2008 21.91 21.98 14.50 16.48 43,861,400
Dec 1, 2008 10.94 12.29 9.74 10.24 19,880,400
Jan 2, 2009 10.31 11.43 9.45 9.50 27,315,100
Mar 2, 2009 8.53 10.86 8.00 9.48 31,953,100
Jun 1, 2009 11.70 13.96 11.45 13.73 26,601,100
Sep 1, 2009 15.72 17.13 15.05 15.26 26,545,400
Dec 1, 2009 14.13 14.81 12.74 14.36 29,521,800
Jan 4, 2010 14.50 15.20 12.75 12.90 26,866,200
Mar 1, 2010 13.35 15.25 13.28 15.02 25,643,200
Jun 1, 2010 13.23 14.28 12.00 12.06 32,606,800
Sep 1, 2010 11.92 13.17 11.79 12.97 26,593,500
Dec 1, 2010 13.47 14.02 13.20 13.55 18,745,200
After observing Dell’s Inc. stock prices over the past three years, we could
conclude that there were ups and downs in the stock prices, especially a
noticeable drop in the prices during 2009, and then it increased in 2010 but didn’t
reach the prices of 2008.
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Dell Inc. (DELL) Historical Prices, http://finance.yahoo.com/q/hp?
s=DELL&a=01&b=1&c=2008&d=11&e=31&f=2010&g=m
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Industry average: 1
Description
1 Day Price Market Div. Yield
P/E ROE %
Change % Cap %
Sector: Technology 0.49 77871.4B 50.97 10.87 1.00
Industry: Personal Computers 0.30 325.1B 22.20 25.50 0.00
Companies
Apple Inc. (AAPL) 0.30 298.3B 21.46 35.28 0.00
Dell Inc. (DELL) 0.29 26.8B 13.35 34.50 NA
Net
Long-Term Price to Price to
Profit
Description Debt to Book Free Cash Flow
Margin %
Equity Value (mrq)
(mrq)
Sector: Technology 57.06 8.42 5.81 -280.72
Industry: Personal Computers 88.07 6.35 11.40 16.90
Companies
Apple Inc. (AAPL) NA 6.23 21.18 80.24
Dell Inc. (DELL) 88.07 3.93 5.34 205.31
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Industry Browser - Technology - Personal Computers - Company List,
http://biz.yahoo.com/p/811conameu.html
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Conclusion
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