Analysis Financial Statement Of Company

2282 words - 10 pages

Financial Statement Analysis Paper
Example 1: Dell Computer Dell Inc.
Income Statement Revenue Cost of Goods Sold Gross Profit R&D Selling General & Administrative Non Recurring Others Operating Income Depreciation Expense Other Income/Expense EBIT Interest Expense Tax Expense Income from Cont Operations Net Income Balance Sheet Cash Short Term Investments Accounts Receivable Inventory Other Current Assets Total Current Assets Long Term Investments PP&E Net Goodwill Intangibles Other Assets Total Assets Current Year $ 61,494 49,128 12,366 661 7,302 0 0 4,403 970 116 3,549 199 715 2,635 2,635 Percent 100.0% 79.9% 20.1% 1.1% 11.9% 0.0% 0.0% 7.2% 1.6% 0.2% 5.8% 0.3% 1.2% 4.3% 4.3% Prior Year ...view middle of the document...

3% 2.0% 9.0% 56.3% 10.2% 16.7% 0.0% 83.2%

12,045 113 2,701 14,859 1,898 5,472 0 22,229 0 11,189 0 20,677 -27,904 309

45.5% 0.4% 10.2% 56.1% 7.2% 20.6% 0.0% 83.9% 0.0% 42.2% 0.0% 78.0% -105.3% 1.2% 16.1%

20.1%

5,641

16.8%

4,271

RATIO ANALYSIS Growth Ratios Sales Growth Income Growth Asset Growth Activity Ratios Receivable Turnover Inventory Turnover Fixed Asset Turnover Profit Ratios Profit Margin Return on Assets Return on Equity Liquidity Ratios Current Ratio Quick Ratio Solvency Ratios Debt to Total Assets Times Interest Earned (Accrual)

16.2% 83.9% 14.7% 6.6 41.8 31.5 4.3% 7.3% 39.3% 1.49 1.42 0.80 17.83

-13.4% -42.2% 27.0% 7.1 44.6 24.3 2.7% 4.8% 28.9% 1.28 1.22 0.83 13.65

-0.1% -15.9% -3.8% 8.6 48.2 26.8 4.1% 9.2% 61.9% 1.36 1.30 0.84 36.74

Industry Measures Product Revenue Services Revenue Total Revenue

Jan-11 $ 50,002.0 $ 11,492.0 $ 61,494.0 81.31% 18.69% 100.00%

Jan-10 $ 43,697 $ 9,205 $ 52,902 82.60% 17.40% 100.00%

Jan-09 $ 52,337 $ 8,764 $ 61,101 85.66% 14.34% 100.00%

Revenues come from the sale of Dell’s products and services. Revenues increased a combined 16% from January 2010 to January 2011 primarily because of the recovery in the economy. The health of the economy is critical for the company because its products are not primary products; so during a recession, people will rather save money for food than buy a computer. This explains the big decline in revenues for the 2009 fiscal year (a 13.4% drop compared to the previous year). The increase in 2010 is also due to a change in business strategy. Dell is growing its enterprise solutions and services business which changed the revenue stream of the company. Services revenue has weighted more on total revenues year after year. It went from 14.3% of revenues in January 2009 to 18.7% of revenues in January 2011. Also, services revenue has been profitable with a 25% growth in 2010 and 5% growth in 2009. (Part 2, Item 7, Form 10-K, Dell Inc., January 2011) Cost of goods and services have been relatively stable as a percentage of revenue for the past three years. Other expenses such as selling and administrative expenses, R&D expenses, depreciation expenses and more have also been relatively constant in the last three years. However, the company did have higher costs on a dollar basis. This increase in amortization of intangible assets and other cost is due to the increase in intangible assets from the Perot Systems in Fiscal 2010. Also, the company had a migration to contract manufacturers and closures of certain manufacturing facilities that caused an increase in severance and facility action costs. Even with all these value increases, the company has done a good job keeping their costs stable

as a percentage of revenues. Dell is well managed and knows how to control their costs. The company is on top of every detail and there are no surprise costs to harm the company. (Part 2, Item 7, Form 10-K, Dell Inc. 2011) The net income performance...

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