# Dell's Financials

## Dell's Financials

• Submitted By: kieso
• Date Submitted: 10/13/2008 11:07 PM
• Words: 348
• Page: 2
• Views: 628

There aren’t any financial ratio’s I can come up with, with the limited data given. These are percentage changes from year-year data for each given category.

Net Revenue: (millions)

07-06 years
(57,420-55,788) = .029253 = 3% increase in net revenue
55,788

06-05
(55,788-49,121) = .135726 = 14% increase in net revenue
49,121

05-04
(49,121-41,327) = .18859 = 19% increase in net revenue
41,327

Gross Margin: (Total sales (revenue)-total cost of goods sold)/total sales (revenue)

07-06 years
(9,516-9,891) = -.037021 = *4% decrease in gross margin*
9,891

06-05
(9,891-9,018) = .09681 = 10% increase in gross margin
9,018

05-04
(9,018-7,563) = .192383 = 19% increase in gross margin
7,563

*This decrease in gross margin is from the increase of cost of goods sold from 06-07, even though the net revenue increased the cost of goods sold grew more.

Operating Income: (operating expenses – gross profit) – general cost of upkeep

07-06
(3,070-4,382) = -.299407 = *30% decrease in operating income*
4,382

06-05
(4,382-4,206) = .041844 = 4% increase in operating income
4,206

05-04
(4,206-3,525) = .193191 = 19% increase in operating income
3,525

*These massive decrease from operating income comes from the loss in gross profit from 06-07 and the substantial increase in operating expenses.

Net Income

07-06
(2,583-4,608) = -.439453 = *44% decrease in net income*
4,608

06-05
(4,608-4,403) = .046556 = 5% increase in net income
4,403

05-04
(4,403-3,711) = .186472 = 19% increase in net income
3,711

As you can see throughout this analysis, each year the gross margin, operating income and net income have decreased significantly. The gross margin is key in our analysis because it is one of the main profitability ratios. Ultimately, dell should have realized in 05 that an internal assessment was needed to minimize costs and expenses besides...