Dell Financial Strategy Analysis

812 Words Jan 10th, 2018 3 Pages
Of this figure, $19B is directly attributable to their mobility business initiatives, which have been the most profitable and fastest growing of any in the history of the company (Dell Investor Relations, 2012). Dell is known for their expertise in mass customization and lean manufacturing strategies predicated on one of the most efficient and well-managed supply chains in the high technology industry (Gunasekaran, Ngai, 2009). Despite a global recession Dell has also been able to sustain their profitability across several key metrics, shown in Appendix A, Dell Financial Ratio Analysis. Net Profit Margin % has grown from 3.998% to 5.626% from 2002 to 2012 in addition Return on Equity (ROE) has grown from 26.54% to 39.161% in the same period. These have been the positive aspects of the company's performance. There are troubling signs about Dell's financial condition as well, as is shown in the Activity ratios. With Operating Cycles changing from 30.144 days to 67.547 days in ten years, in addition to Average Collection period changing from 30.237 days to 58.624 days changing in the same period, it's clear Dell is struggling to increase profitability. All of this is reflected also in the latest Holding Period Return Ratio, which is -22.59%, indicating that investors are not valuing the Dell stock as an…
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