Dell’s Working Capital

Using the assumptions given in the case, all elements of income statement and balance sheet can be projected for next three years 2010, 2011 and 2012. Sales cycle of the products of the company is such that sales of a particular product increases initially for few years and then starts to decline as the new technology

Dell's cash conversion cycle has been negative. The negative numbers reflect that there is a disconnect between the direct labor manufacturing overhead in creating the final product. But some people think that it is okay and that Dell has an excellent future planned.

Dell Company is one of the leading brands in the computer industry. Its long stint in this computer business has been inspiring for many small IT companies and current entrepreneurs. The given case study has blended a lot of crucial info on the Dell regarding its early growth period with issues, industry specific details, business model, product line and structure, issues and policies in its business in cooperation with future prospects of the Dell Company. Hence, this paper will reply the below questions, based on this case study of Dell Company.

* Our company’s sales forecast has been based on performance from previous years along with market circumstances. We are looking at the future of the business objectively which we then can evaluate past to

□ The Company was founded in 1984 by Michael Dell, now the computer industry's longest-tenured chief executive officer, on a simple concept: that by selling personal computer systems directly to customers, Dell could best understand their needs, and provide the most effective computing solutions to meet those needs.

1. A conservative 1% growth rate was used in calculating UST’s future sales growth potential.

For sales from 2001 to 2002, we are projecting a 13% increase because we want to base the same revenue growth as the previous fiscal year. It will take some time for the company to do better like

Dell is a leading computer technology organization. Dell constantly keeps up with changes in their market to stay competitive. Dell is focusing on cost from issues of storage to transportation of products.

of $12,622 million during 2013[4]. However, while the net sales may have decreased, the stock

This segmented shows a growth rate of 2,50% from 2007-2011. According to the information provided in the case, the sales of this business line should be declining at 6,25% per year not increasing. Therefore its sales should decrease in this percentage not increase as projected per Liedtke.

And in Michael Dell’s own words about the future: “The epicenter of the company has really shifted to these other areas and away from the PC,” Dell said. “If fiscal year ‘11 was about getting operationally fit, then fiscal year ‘12 will be about leveraging this strength.” (Ricadela, 2011).

We have projected the accounts of payable and receivables for 5 years ahead based on the ratio of the corresponding accounts to sales in the year 1971. The Ratio is as below.

During performing the sales forecast for Victoria's Secret, I learned that for most part that Victoria's Secret has an incline in their profits. They have however hit a few bumps here and there. The causes of this could be more cost for Victoria's Secret purchasing materials and production of their products. Another reason for this could also be a slower rate in sales than usual. Like I said, for the most Victoria Secret has seen an incline in their profits and sales throughout the years. Performing the percentage of sales forecast for Victoria's Secret, I established a forecasted sales of 5 percent which means that they would have to have a sales of $2,808 compared to their last years $2,675. This is a very feasible number for Victoria Secret to achieve, considering that majority of their money in assets outweighs their liabilities.

The most important questions facing Dell was – how to grow and at what cost. The purpose of this research is to analyze Dell’s core strategy, its working capital management, and come up with a plan to finance its future growth by evaluating its financial statements.

5. In Tab #5, we can see that management can reduce the amount of new investment needed by