Financial Analysis of Dell Essay Example | Topics and Well Written Essays - 3000 words

Financial analysis of dingle - Essay Exampledell, Inc. is a leading supplier of information technology equipment and peripherals such as printers, music players, mobile phones, laptop and desktop computers and softwargon, and servers and storage systems. Founded in 1984 by Michael Dell, currently the Chairman of the Board, it generated derive sales of $55.9 billion and profits of $3.6 billion in 2006 on the basis of a direct-selling business deterrent example to a growing global corporate and consumer market. Customers place orders over the phone or the Internet, pay for purchases up front, and wait for on-time delivery.Its business model allows Dell to sell computers at a lower price and that are tailor-fit to each customers needs. Although it began by selling to individual consumers, the ships social club now generates over 75% of its sales from super corporate accounts. Using a supply chain and financial management system that it innovated and successfully continues to impr ove, the guild keeps spare parts and finished products inventories low, its cash volumes high, and net profits optimized to drive phenomenal corporate growth. In the task of managing a 65,000-strong global workforce spread in seven manufacturing sites in the U.S., Brazil, Malaysia, China, and Ireland, Dell is assisted by President/CEO Kevin Rollins and a team of directors and professional managers from its Austin, Texas headquarters and five regional offices (Dell, 2006e, p. 22-24).The company belongs to the highly competitive technology sector populated by established companies. It competes for global market tract in computer hardware sales with IBM, HP, Xerox, and Apple of the U.S., and with NEC, Fujitsu, and Canon of Japan. Due to the effects of global rivalry on operating margins, Dell has evolved from a mere assembler and seller of products developed by some other companies - such as Intel that supplies computer chips and Taiwanese companies supplying wires and other parts - into a designer of its testify products like PDAs and PCs.The first half of 2006 was good for Dell. Fortune ranked the company 25th among the 500 Largest U.S. Corporations twenty-third in annual profit growth measured in Earnings per Share over the persist ten years hitting 33.1% and 2nd in Ten-Year Total Return to Shareholders with 39.4%, making it the second surmount investment in the list (McGirt, 2006). Its revenues made it the 88th largest company and the third largest supplier of computers and office equipment in the area after IBM and Hewlett-Packard (Lustgarten, 2006).However, the second half of the year has been brutal for the company. First, a battery in a Dell laptop exploded in the U.S., which turned out not to be an isolated case, leading Dell to recall and replace 4.1 million batteries, the largest such order in the history of American business, opening the company to embarrassment and potential lawsuits. Second, Dell made public that in August 2005, the Securiti es and Exchange Commission (SEC) launched an investigation of its accounting practices. This double trouble