79494197 financial-statement-analysis-and-strategic-analysis-of-dell

4,100 views

Published on

Published in: Education
  • Be the first to comment

79494197 financial-statement-analysis-and-strategic-analysis-of-dell

  1. 1. 1. Income Statement2. Balance Sheet3. Ratio Analysis4. Space Matrixs E155. BCG Matrixs6. Internal External Dell Strategy Matrixs IFE7. External Formulation Analytical Factors evaluation Matrixs Frame Work And8. CPM9. Grand Strategy Financial Statement10. QSPMEnd Show Analysis 5-1
  2. 2. Introduction of Dell Dell, Inc. is an American1. Income Statement multinational information2. Balance Sheet technology corporation based in 13. Ratio Analysis4. Space Dell Way, Round, Texas, United Matrixs States, that develops, sells and5. BCG Matrixs6. Internal supports computers and related External products and services. Bearing the Matrixs IFE7. External name of its founder, Michael Dell, Factors the company is one of the largest evaluation Matrixs technological corporations in the8. CPM world, employing more than9. Grand Strategy10. QSPM 103,300 people worldwide. Dell is listed at number 41 in the FortuneEnd Show 500 list. 5-2
  3. 3. Vision and Mission • Vision Statement:1. Income • "Dell is committed to being a good neighbor in the Statement communities we call home. We must continue to grow2. Balance Sheet3. Ratio Analysis responsibly – protecting our natural resources and4. Space practicing sustainability in all its forms – and improve Matrixs the communities where we live and work through our5. BCG Matrixs financial and volunteer efforts."6. Internal External • MISSION STATEMENT: Matrixs IFE • Dells mission is to be the most successful Computer Company in the world7. External at delivering the best customer experience in markets we serve. In doing so, Factors Dell will meet customer expectations of. evaluation • Highest quality Matrixs • Leading technology8. CPM • Competitive pricing9. Grand Strategy • Individual and company accountability10. QSPM • Best-in-class service and support • Flexible customization capabilityEnd Show • Superior corporate citizenship • Financial stability 5-3
  4. 4. DELL INC. Income Statement S tatement of Operations1. Income Statement (in mil lions)2. Balance Sheet Annual Results3. Ratio Analysis FY09 FY10 FY114. Space Incom e Statement: Matrixs Net revenue $61,101 $52,902 $61,4945. BCG Matrixs6. Internal Cost of revenue 50,144 43,641 50,098 External Gross margi n 10,957 9,261 11,396 Matrixs IFE S G&A 7,102 6,465 7,3027. External Factors R&D 665 624 661 evaluation T otal operating expenses 7,767 7,089 7,963 Matrixs Operati ng incom e 3,190 2,172 3,4338. CPM9. Grand StrategyInves tm ent and other i ncome, net 134 (148) (83)10. QSPM Incom e before taxes 3,324 2,024 3,350 Incom e tax provision 846 591 715End Show Net inc ome 2,478 1,433 2,635 5-4
  5. 5. DELL INC. Balance Sheet Statement of Financial Position (in millions)1. Income Annual Results Statement FY09 FY10 FY11 Assets:2. Balance Sheet Cash & cash equivalents $8,352 $10,635 $13,9133. Ratio Analysis Short-term investments 740 373 452 Accounts receivable, net 4,731 5,837 6,4934. Space Financing receivables, net 1,712 2,706 3,643 Matrixs Inventories, net 867 1,051 1,301 Other 3,749 3,643 3,2195. BCG Matrixs Total current assets 20,151 24,245 29,0216. Internal PP&E, net 2,277 2,181 1,953 External Investments 454 781 704 Long-term financing receivable, net 500 332 799 Matrixs IFE Other non-current assets 3,118 6,113 6,1227. External Total assets: 26,500 33,652 38,599 Factors Liabilities & Stockholders Equity: Short-term borrowings 113 663 851 evaluation Accounts payable 8,309 11,373 11,293 Matrixs Accrued and other 3,736 3,884 4,1818. CPM Short-term deferred services revenue 2,701 3,040 3,158 Total current liabilities 14,859 18,960 19,4839. Grand StrategyLong-term debt 1,898 3,417 5,14610. QSPM Long-term deferred services revenue 3,000 3,029 3,518 Other non-current liabilities 2,472 2,605 2,686 Total liabilities: 22,229 28,011 30,833End Show Stockholders equity: 4,271 5,641 7,766 Total liabilities & equity: 26,500 33,652 38,599 5-5
  6. 6. Ratios Analysis DELL INC.   Selected Financial Data & Ratios   (in millions, except per share data and ratios)  1. Income (Unaudited)   Statement   Yearly results for liquidity, Profi tability, S ol vency, and A ctivity Rati os2. Balance Sheet FY09 FY10 FY113. Ratio AnalysisLiqui dit y: Net working capi tal ratio 5292 5285 95384. Space Current rati o 1.356 1.278 1.489 Matrixs Quick ratio 1.30 1.22 1.42 Cash Ratio 0.611 0.58 0.7375. BCG Matrixs A ctivity Rat ios:6. Internal A ccount Recei vable Turnover Ratio 12.91 10.01 19.55 External # of Days Account Receivabl e outstanding 28.27 36.46 18.67 Matrixs IFE F ixed Ass ets turnov er ratio 26.83 24.25 31.48 Inventory t urnover ratio 57.83 45.50 42.607. External A verage # of days inventory out standing 6.31 8.02 5.56 Factors Operati ng Cycle 64.14 53.53 51.16 evaluation T otal A ssets turnover Ratio 2.305 1.57 1.59 Matrixs P rofitabil ity:8. CPM Return on Investm ent 0.28% 0.12% 0.17% Gross m argin 17.93% 17.50% 18.53%9. Grand Strategy Operati ng margin 5.44% 3.82% 5.44%10. QSPM Return on Assets 3.83% 2.11% 2.84% Net profit margin 4.05% 2.70% 4.28% S olvency Ration:End Show Debt Ratio 0.838 0.832 0.798 Debt to equity ratio 5.2 4.96 3.97 5-6
  7. 7. Common Size Analysis Vertical Analysis1. Income   FY09 FY10 FY11 Statement Income Statement:2. Balance Sheet   3. Ratio AnalysisNet revenue $61,101 100% $52,902 100 $61,494 1004. Space Cost of revenue 50,144 82 43,641 82 50,098 81.46811 Matrixs5. BCG Matrixs Gross margin 10,957 18 9,261 18 11,396 18.531896. Internal SG&A 7,102 12 6,465 12 7,302 11.87433 External Matrixs IFE R&D 665 1 624 1 661 1.0749027. External Total operating expenses 7,767 13 7,089 13 7,963 12.94923 Factors evaluation Operating income 3,190 5 2,172 4 3,433 5.582658 Matrixs8. CPM Investment and other income, net 134 0 -148 0 -83 -0.134979. Grand Strategy Income before taxes 3,324 5 2,024 4 3,350 5.44768610. QSPM Income tax provision 846 1 591 1 715 1.162715End Show Net income 2,478 4 1,433 3 2,635 4.284971 5-7
  8. 8. Horizontal Analysis Balance sheetDell Incorporation Horizontal Analysis of Balance sheet FY09 FY10 FY11 Assets: Cash & cash equivalents $8,352 $100 $10,635 27.33 $13,913 30.821. Income Short-term investments 740 100 373 -49.59 452 21.17 Statement Accounts receivable, net 4,731 100 5,837 23.37 6,493 11.232. Balance Sheet Financing receivables, net 1,712 100 2,706 58.06 3,643 34.62 Inventories, net 867 100 1,051 21.22 1,301 23.783. Ratio Analysis Other 3,749 100 3,643 -2.83 3,219 -11.634. Space Total current assets 20,151 100 24,245 20.31 29,021 19.96 Matrixs PP&E, net 2,277 100 2,181 -4.21 1,953 -10.455. BCG Matrixs Investments 454 100 781 72.02 704 -9.85 Long-term financing receivable, net 500 100 332 -33.6 799 140.666. Internal Other non-current assets 3,118 100 6,113 96.05 6,122 0.147 External Total assets: 26,500 100 33,652 26.98 38,599 14.7 Matrixs IFE Liabilities & Stockholders Equity:7. External Short-term borrowings 113 100 663 486.72 851 28.35 Factors Accounts payable 8,309 100 11,373 36.87 11,293 -0.703 evaluation Accrued and other 3,736 100 3,884 3.96 4,181 7.64 Matrixs Short-term deferred services revenue 2,701 100 3,040 12.55 3,158 3.888. CPM Total current liabilities 14,859 100 18,960 27.59 19,483 2.75 Long-term debt 1,898 100 3,417 80.03 5,146 50.599. Grand Strategy Long-term deferred services revenue 3,000 100 3,029 0.96 3,518 16.1410. QSPM Other non-current liabilities 2,472 100 2,605 5.38 2,686 3.109 Total liabilities: 22,229 100 28,011 26.01 30,833 10.07End Show Stockholders equity: 4,271 100 5,641 32.08 7,766 37.67 Total liabilities & equity: 26,500 100 33,652 26.98 38,599 14.7 5-8
  9. 9. SPACE MATRIX1. Income Statement2. Balance Sheet3. Ratio Analysis4. Space Matrixs5. BCG Matrixs6. Internal External Matrixs IFE7. External Factors evaluation Matrixs8. CPM9. Grand Strategy10. QSPMEnd Show 5-9
  10. 10. Boston consulting group or BCG matrix1. Income Statement2. Balance Sheet Relative market Share3. Ratio Analysis4. Space Matrixs5. BCG Matrixs6. Internal External Matrixs IFE7. External Asia Factors evaluation Region Revenues Profit Percentage of Growth rate Relative e Revenue Market Share Matrixs8. CPM Americas $32,940M $2,978M 66.94% 21% 75%9. Grand Strategy Europe $10,787M $818M 21.922% 61% 20%10. QSPM Asia-Pacific $5,478M $458M 11.133% 29% 10%End Show Total $49,205M $4,254M 100% 100% 95% 5-10
  11. 11. SPACE MATRIX CONT. FS Conservative 6 Aggressive1. Income 5 Statement2. Balance Sheet 43. Ratio Analysis 34. Space 2 Matrixs 15. BCG Matrixs6. Internal CA -6 -5 -4 -3 -2 -1 1 2 3 4 5 6 IS External -1 Matrixs IFE -27. External Factors -3 evaluation -4 Matrixs8. CPM -59. Grand Strategy Defensive -6 Competitive10. QSPM ESEnd Show 5-11
  12. 12. THE INTERNAL-EXTERNAL (IE) MATRIX The IFE Total Weighted Score The EFE Total Weighted Strong Average Weak1. Income 3.0 to 4.0 2.0 to 2.99 1.0 to 1.99 Statement2. Balance Sheet High I II III3. Ratio Analysis 3.0 to 3.994. Space Americas Matrixs Score5. BCG Matrixs Europe6. Internal External Matrixs IFE Medium IV V VI7. External 2.0 to 2.99 Factors evaluation Matrixs Dell8. CPM Low VII VIII IX9. Grand Strategy10. QSPM 1.0 to 1.99 Asia-PacificEnd Show Hold and Maintain 5-12
  13. 13. THE INTERNAL-EXTERNAL (IE) MATRIX CONT.1. Income Statement Region Revenues Profit Percentage of IFE Score2. Balance Sheet Revenue3. Ratio Analysis4. Space Matrixs Americ $32,940M $2,978M 66.94% 3.55. BCG Matrixs as6. Internal External Matrixs IFE Europe $10,787M $818M 21.922% 2.87. External Factors Asia- $5,478M $458M 11.133% 1.2 evaluation Pacific Matrixs8. CPM9. Grand Strategy Total $49,205M $4,254M 100%10. QSPMEnd Show 5-13
  14. 14. EXTERNAL FACTOR EVALUATION (EFE) Key External Factors MATRIX Weight Rating Weighted Score Opportunities Demand for personal computers continues to grow. 0.100 3 0.3001. Income Many customers switching from desktops to notebooks 0.050 4 0.200 Statement Microsoft desires to partner with Dell. 0.100 4 0.4002. Balance SheetConsumer electronics is a profitable business. 0.050 2 0.1003. Ratio Analysis Higher consumer spending in the US. 0.025 2 0.0504. Space Incorporated managed and professional services. 0.025 2 0.050 Matrixs5. BCG Matrixs Global enterprise systems. 0.050 3 0.150 Training and certification program. 0.025 2 0.0506. Internal Financial services offered. 0.025 3 0.075 External Growth in the color printer market. 0.025 2 0.050 Threats       Matrixs IFE Alliance in the PC industry 0.050 3 0.1507. External Higher oil prices could crimp consumers’ spending. 0.050 3 0.150 Factors evaluation Commercial demand fails to accelerate. 0.025 2 0.050 Matrixs Competitors are strong. 0.150 3 0.450 Slow growth in the PC market. 0.100 2 0.2008. CPM Component price fluctuation 0.025 4 0.1009. Grand Strategy for computing power has decreased. Price 0.025 3 0.07510. QSPM Computer market has broadened. 0.050 3 0.150 Currency fluctuations in the international markets. 0.050 2 0.100End Show TOTAL 1.00 2.85 5-14
  15. 15. Competitive Profile Matrixs   Apple HP  Dell  Critical Weight Rating Weighte Rating Weighted Rating Weighted1. Income Success d Score Score Score Statement Factors 2. Balance Sheet Market Share 0.10  2  0.20  3  0.30  4  0.40 3. Ratio Analysis Price 0.10  2  0.20  3  0.30  4  0.40 4. Space Financial 0.15  3  0.45  4  0.60  3  0.45  Matrixs5. BCG Matrixs Position 0.15  4  0.60  3  0.45  3  0.45  Product Quality 0.15  4  0.60  2  0.30  3  0.45 6. Internal External Consumer 0.04  4  0.16  2  0.08  3  0.12  Matrixs IFE Loyalty 0.06  4  0.24  3  0.18  3  0.18 7. External Advertising 0.06  2  0.12  2  0.12  3  0.18  Factors Management 0.14  4  0.56  2  0.28  2  0.28  evaluation Global 0.05  3  0.15  2  0.10  3  0.15  Matrixs Expansion8. CPM Total 1.00  3.02                              2.71                           3.069. Grand Strategy10. QSPMEnd Show 5-15
  16. 16. GRAND STRATEGY MATRIX1. Income Statement2. Balance Sheet3. Ratio Analysis4. Space Matrixs5. BCG Matrixs6. Internal External Matrixs IFE7. External Factors evaluation Matrixs8. CPM9. Grand Strategy10. QSPMEnd Show 5-16
  17. 17. QSPM Strategic Alternatives Key Internal Factors Weight Build another  Expand marketing efforts  manufacturing plant in  in Asia and Europe1. Income the US. Statement2. Balance Sheet Strengths AS TAS AS TAS3. Ratio Analysis Built-to-order personal computers sold directly to customers. 0.100 --- --- --- ---4. Space Direct sales via mail, phone orders, and the Internet. 0.050 --- --- --- --- Matrixs5. BCG Matrixs Built-to-order personal computers eliminate markups of 0.025 --- --- --- ---6. Internal resellers. External Built-to-order personal computers greatly reduce the costs           Matrixs IFE and risks associated with carrying large stocks of parts, 0.050 --- --- --- --- components, and finished goods.7. External Factors Dell is the current PC industry leader. 0.100 3.0 0.300 2.0 0.200 evaluation Matrixs Dell has regional and manufacturing plants globally. 0.050 1.0 0.050 4.0 0.2008. CPM9. Grand StrategyDell is a well-known brand name. 0.050 4.0 0.200 3.0 0.15010. QSPM Dell’s direct-to-consumer strategy has given the company a           substantial cost and profit margin over its rivals. 0.050 --- --- --- ---  End Show 5-17
  18. 18. QSPM strengths and weakness (cont.) Dell has a good relationship with the company’s large corporate and government customers and continues to focus 0.025 1.0 0.025 2.0 0.050 on these sales and service relationships.1. Income Statement2. Balance SheetDell holds 29.1% of the total market for personal computer           sales in the Americas, putting Dell ahead of its competitors. 0.050 3.0 0.150 2.0 0.1003. Ratio Analysis4. Space Dell’s built-to-order manufacturing process results in rapid 0.050 --- --- --- --- Matrixs inventory turnover and reduced inventory levels.5. BCG Matrixs To ensure defect free products, testing is performed by Dell          6. Internal along the process and on the final computer product. 0.050 --- --- --- --- External Matrixs IFE Dell has a wide range of customers including large           corporations, government agencies, healthcare, educational 0.050 4.0 0.200 3.0 0.1507. External institutes, small business, and individuals. Factors evaluation Dell is ranked # 1 by Technology Business because of its Intel-           Matrixs based server satisfaction for 27 of the past 29 quarters. 0.050 --- --- --- ---8. CPM9. Grand Strategy divides its sales and marketing force among the various Dell           customer groups in order to meet each group’s specific 0.025 --- --- --- ---10. QSPM needs. Dell advertises its products on the Internet, TV, and by mailing 0.025 --- --- --- --- a broad range of marketing publications.End Show 5-18
  19. 19. QSPM strengths and weakness (cont.) Weaknesses1. Income Dell has only two manufacturing plants and one 0.025 4.0 0.050 2.0 0.050 Statement regional office in the United States.2. Balance Sheet Dell computers cannot be purchased in retail 0.025 --- --- --- ---3. Ratio Analysis stores.4. Space Dell has over 40 locations globally yet Dell is not           Matrixs the #1 supplier in Asia Pacific, European, Middle 0.050 1.0 0.050 4.0 0.2005. BCG Matrixs East, or African segments.6. Internal External Dell rebrands printers purchased from Lexmark, 0.025 --- --- --- --- Matrixs IFE which is a major production cost for Dell.7. External Factors evaluation Matrixs Dell is too reliant on foreign suppliers, because of          8. CPM this a disruption of fuel supply could make the 0.050 3.0 0.150 1.0 0.050 price of shipping go up.9. Grand Strategy10. QSPM Dell is so large now that it might not be able to 0.025 1.0 0.025 2.0 0.050 grow at the same pace.End Show SUBTOTAL 1.00   1.20   1.20 5-19
  20. 20. QSPM strengths and weakness (cont.) Key External Factors Build another Expand marketing Weight manufacturing efforts in Asia and1. Income plant in the US. Europe Statement2. Balance Sheet3. Ratio Analysis4. Space Opportunities AS TAS AS TAS Matrixs Demand for personal computers continues to grow. 0.100 2.0 0.200 4.0 0.4005. BCG Matrixs6. Internal External Many consumers switching from desktops to 0.050 --- --- --- --- Matrixs IFE notebooks.7. External Factors Microsoft desires to partner with Dell. 0.100 --- --- --- --- evaluation Matrixs Consumer electronics is a profitable business. 0.050 3.00 0.150 1.0 0.0508. CPM9. Grand Strategy Higher consumer spending in the US. 0.025 3.00 0.075 1.0 0.02510. QSPM Incorporated managed and professional services. 0.025 --- --- --- ---End Show 5-20
  21. 21. QSPM strengths and weakness (cont.) Global enterprise systems. 0.050 2.0 0.100 4.0 0.200 Training and certification program. 0.025 --- --- --- ---1. Income Financial services offered. 0.025 --- --- --- --- Statement Growth in the color printer market. 0.025 --- --- --- ---2. Balance Sheet Threats           Alliance in the PC industry 0.050 2.0 0.100 4.0 0.2003. Ratio Analysis Higher oil prices. 0.050 --- --- --- ---4. Space Commercial demand fails to accelerate. 0.025 --- --- --- --- Matrixs Competitors are strong. 0.150 2.0 0.300 3.0 0.4505. BCG Matrixs Slow growth in the PC market. 0.100 --- --- --- ---6. Internal Component price fluctuation 0.025 --- --- --- --- External Price for computing power has decreased. 0.025 --- --- --- --- Matrixs IFE Computer market has broadened. 0.050 --- --- --- ---7. External Currency fluctuations in the international markets. 0.050 1.0 0.050 3.0 0.150 Factors evaluation Matrixs SUBTOTAL 1.00   0.98   1.488. CPM SUM TOTAL ATTRACTIVENESS SCORE     2.18   2.689. Grand Strategy Add  two  new  manufacturing  plants  in  the  United  States  has  the 10. QSPM attractive  score  of  2.18  in  comparison  of  the  expending  the  business  into Europe and Asia which has total attractive score of 2.68.End Show Expand  into  Europe  and  Asia  building  new  manufacturing  plants  and  5-21 retail stores is therefore that the company should introduce

×