PREFACE

In recent decades, information technology has been a highly competitive industry. A long with the process of globalization, many IT companies has established their large world - wide network and get a lot of successes. In order to remain their market share on global market, big companies have innovated their products continuously and have developed proper strategies. Recent years have seen a tough race between big IT companies to gain and maintain their positions. Some of renowned companies we could say are Dell, HP, ACER, Sony, etc. Because of the characteristics of this field, investors need a lot of information to consider which company is profitable and should invest in and to predict their future business potential as well as price of their stock. One of the fundamental ways is using ratios analysis. Basing on companies financial statements, a lot of information about performance, profitability, potential, etc could be extracted. Our group chooses Dell incorporated for our analysis. There are some reasons for this: 1. Information technology has so far played a very important role in our lives. The demand for computer and the internet services are increasing day by day. Therefore, a lot of people want to do their business in this field that makes it become a highly competitive, dynamic and eventful market. In addition, to consider which companies in this area are good to invest in, investors need a sufficient amount of information. A ratios analysis, in this case, could help them have a good grasp of the companies operation. 2. Dell has been a very popular and prestigious Brand in PC, laptop and computer hardware market. At the moment, in Vietnam, many electronic supermarkets and shops become authorized dealers of Dell. Moreover, Vietnamese consumers are more and more familiar with this brand. In recent years, Dells business performance has experienced some changes. Besides suffering from global financial crisis that leads to the decrease in consumers demand, in 2009, Dell lost its 2nd position in computer industry to Acer. Dell is trying to control Asia-Pacific market by changing their method of selling. As of the end of quarter 2 of 2010, Dell gained back their 2nd position from Acer.
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TABLE OF CONTENT
1. Preface: ...............................................................................................P1 2. Table of content:..................................................................................P2 3. Background information:......................................................................p3 4. Analysis of Dell's financial statements:................................................P5 4.1 Table of ratios:.....................................................................P5 4.2 Evaluation and comparison with its main competitors:........P9 5. Recommendation: ...............................................................................P21 6. Appendix:.............................................................................................P22 6.1 Dells financial statements ...................................................P22 6.3 Acers financial statements ..................................................P28 6.2 HPs financial statements .....................................................P33

Background information:
Dell Incorporated: is a multinational information technology corporation based in Round Rock, Texas, United States, that develops, sells and supports computers and related products and services. The company is one of the world's largest computer distributors in terms of both quantity of units sold and gross income, and one of the United States' largest corporations. From 1999 until 2006 Dell delivered more complete computer systems worldwide per quarter than any other PC manufacturer. Bearing the name of its founder, Michael Dell, the company is one of the largest technological corporations in the world, employing more than 96,000 people worldwide. Dell is listed at #38 on the Fortune 500 (2010). Fortune also lists Dell as the #5 most admired company in its industry. As of 2009, the company sold personal computers, servers, data storage devices, network switches, software, and computer peripherals. Dell also sells HDTVs, cameras, printers, MP3 players and other electronics built by other manufacturers. The company is well known for its innovations in supply chain management and electronic commerce. On September 21, 2009, Dell announced its intent to acquire Perot Systems (based in Plano, Texas) in a reported $3.9 billion deal. Perot Systems brought applications development, systems integration, and strategic consulting services through its operations in the U.S. and 10 other countries. In addition, it provided a variety of business process outsourcing services, including claims processing and call center operations. On May 3, 2010, Fortune Magazine listed Dell as the 38th largest company in the United States and the 5th largest company in Texas by total revenue. On August 16, 2010, Dell announced its intent to acquire the data storage company 3PAR. On September 2, 2010 Hewlett-Packard offered $33 a share, which Dell declined to match.

SWOT ANALYSIS
Strengths Customer oriented Weaknesses marketing On January 8, 2009 Dell
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strategies.

announced the closing of its manufacturing plant in Limerick, Well-Known for online selling of Ireland with the loss of 1,900 jobs Computers. and the shift of production to its plant in Poland. Listed in the fortune 500 companies as the 25th largest Dell not able to attract the company. students of schools and colleges, this segment earns only 5% of total Dell offer computers with AMD revenues. and Dell processor. Lot of criticism against the Dells Offer wide range of PC, Server, claim of worlds most secured Laptops, Monitors and LCDs, Data notebooks. storage devices, network switches and software. Dell willingly discontinued the worlds most secure laptops Dell built computer on customer advertisement after the declaration provided specifications. of the NAD investigation. Dell always keen to embed latest Dell have no proprietary technology in its products. technology, the currently used technology by dell are shared by the It has a reliable support and other major competitors. service. Dell is dependent on its suppliers Efficient Inventory management. Dell became the first company in the information technology industry to establish a product-recycling goal. Opportunities Threats

India, Pakistan and Bangladesh Fluctuation in currency outside are the untapped markets. US. Market penetration in education Major competitors in the market. and Government markets. Most of the countries are hit by Cost reduction in latest recession which may result in the technology. reduction of revenues. Partnership or acquiring of
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suppliers. Dell has opportunity to computer directly to retailers.

sell

Government Policies. Bargaining of Suppliers.

Rapid change in technology obsoletes the product in small span of time. Aggressive competitors. marketing by

ANALYSIS OF DELLS FINANCIAL STATEMENTS

A. TABLE OF DELLS FINANCIAL RATIOS

I. Liquidity:

2008 Current Assets Current Liabilities Inventories Cost of goods sold 19,880 18,526 1,180 49,462

2009 20,151 14,859 867 50,144

2010 24,245 18,960 1,051 43,641

1.073 Current ratio = Quick ratio = 1.009

1.356 1.298

1.279 1.223

Inventory Turnover Ratio =

41.917

57.836

41.523
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II. Leverage:

2008 Long term debt Long term deferred service revenue Preferred share Other noncurrent liability Equity Total long term liability 362 2774 0 2070 3,735 5206

2009 1,898 3000 0 2472 4,271 7370

2010 3,417 3029 0 2605 5,641 9051

Long term debt to total capitalization ratio = Long term debt/( Long term deferred service revenue + Preferred share + Other noncurrent liability + Equity)

0.582

0.633

0.616

Total liabilities Total assets

23,732 27,561

22,229 28,011 26,500 33,652

Debt ratio =

0.861

0.838

0.832

EBIT Annual interest expense

3,440 387

3,190 134

2,172 148

Time interest earned ratio =

8.889

23.806 14.67

III.

Profitability:

2008 Net income Total asset Ordinary stock 2,94 7 27,5 61 3,735

2009 2,478

2010 1,433

26,500 33,652 4,271 5,641

78.9% ROE 10.7% ROA = Net Profit Margin Ratio = 4.8%

58% 9.4% 4.1%

25.4% 4.3% 2.7%

IV.

Operating efficiency ratio:

2007 2008
3,190

2009
2,172 52,90

Operating income Sales

3,440

61,133

61,101

Total assets

27,561

26,500

33,65 2

Total asset turnover = Operating profit margin

2.22

2.30

1.57

5.63%

5.22%

4.12 %

Total asset turnover = Operating income return on investment

2.218

2.306

1.572

0.125

0.120

0.065

B. Evaluation and comparison with its main competitors

I. Liquidity:

Figure: ratio

dells

liquidity

1.

Current ratio:

Current ratio Acer HP Dell

2007 1.342 1.207 1.073

2008 1.248 0.978 1.36

2009 1.291 1.221 1.279

The current ratios for Dell in three recent fiscal years were all above 1. There is a significant increase in that ratio from 2007 to 2008 ( from 1.073 to 1.356 ), but a slight decrease in 2009. In 2009, it is equal to 1.279, meaning that for every dollar of near term liabilities, Dell can have $1.279 from liquidating its current asset to pay its liability. Compared to that ratio of the industry (2.2), it seems that Dell pays its debts inefficiently when they come due However, to gain a better point of view, we should make comparison between Dells current ratio with other competitors ones. From the figure above, it implies that Dells ability to pay back the current debts through 3 years has been better than HPs. Compared with Acer on average through 3 years, the current ratio of Dell is 1.236 which is smaller than that of ACER 1.294. It means that Dell's ability to meet its current obligations is lower than Acer's. But the difference is not many, so it is quite difficult to evaluate liquidity of those two incorporates through the ratio. Because it is not always easy to convert inventory into cash, a quick ratio should be used to evaluate the liquidity of Dell.

2. Quick ratio:
2007 Acer HP Dell 1.105 1.002 1.009 2008 0.98 0.828 1.298 2009 1.101 1.079 1.223

Dells quick ratio for 2009 was 1.223 compared with 1.009 in 2007 and 1.298 in 2008. Again, it is a quite low number compared with 2.1 of the
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industry. It shows the relatively low capacity of Dell to use its liquid asset to meet short term liabilities. Again, compared with two main competitors in the PC manufacturing industry, Dells short term financial stability measured by quick ratio is better than HP. The quick ration of Dell is greater than that of Acer in average (Dell: 1.777, Acer 1.029). This ratio gives investors a contrasting conclusion because it shows Dells liquidity is higher. It is more reliable as it excludes inventory which is most difficultly converted into cash for debt payment.

3. Inventory Turnover Ratio

2007 Acer HP Dell 10.7 9.759 41.917 2008 12.216 11.343 57.836 2009 12.262 14.23 41.523

Dell inventory turnover ratio declined from 57.836 in 2008 to 41.523 in 2009. This ratio in 2009 is also the lowest number among 3 recent years. The figure implies that there are nearly 42 times in one accounting period that Dell turnover its inventory. Compared with both HP and Acer, Dells ratio is so much higher. It is a very excellent point because Dell could reduce a huge amount of money spending on storage. It also implies that Dell operates more efficiently. It takes shorter time relatively to Dells main competitors to flush its inventory. This fact is explained partly by Dell method of direct selling, through which customer could place orders online, as a result, there is not much demand for storage. Another ratio which measures liquidity is average collection period.

4. Average collection period:

Dell Acer HP
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2007 2008 2009

35.103 27.875 39.721

86.72 72.638 71.527

46.486 51.647 52.142

Over 3 years, Dell has had a much lower ratio than HP (on average Dell: 34 days but HP: 50 days). It could be considered a good point of Dell. It shows that their policies on account receivables work well. However, while HPs ratio has increased steadily, Dell had a decrease in 2008 and rose again in 2009. This shows that HP account receivables management became less effective in 2008 and 2009. Obviously, Dells average collection period is approximately by a half of that of Acer. It proves that Dells collecting money from sales credit to pay debt in emergency situation works efficiently

II.Leverage:
Debt Ratio
Dell 2007 2008 2009 86.1% 83.9% 83.2% HP 56.6% 65.6% 64.7% Acer 68.4% 66.2% 68.3%

1.

In examining this ratio, Dell had a debt ratio of 0.832 for 2009, which is smaller than the 2008 debt ratio at 0.839. In 2009, the debt ratio implies that 83.2% of Dells asset is financed by liabilities. Dell uses a large proportion of debt in its capital structure, placing Dell at risk. However, these ratios are respectable because the company still displays it has more assets than debt and this can be attractive for potential investors and lenders, thus providing increased leverage against its competitors. If the debt ratio were closer to 1 or over 1 a
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company might be struggling in satisfying debt repayments, thus hurting the companys chances of attracting future capital. Having a look at HPs debt ratio, Dells is higher than HPs. It shows that Dell use quite more debt than HP. From the point of view of investors, this could be a good point because Dell has higher profitability but it also means that Dells ability to pay back debt is lower. Dells ratio had a trend of decreasing over 3 years while HP increased quite much in 2008 and decreased a bit in 2009. Dell also has higher debt ratio than Acers, and both are quite stable through 3 years. For example, in 2009, Dells counts 83.2% of total assets while it is 68.3% for Acer. The ability to pay debt of Dell Inc is lower. The reason could be an economic turndown as well as an expanding of investment through debt under Mr Dell Dells president.

2.

Long term debt to total capitalization ratio

Dell HP 22.1% 35.5% 43.6% Acer 68.429% 66.185% 68.25%

2007 2008 2009

58.2% 63.3% 61.6%

Dell had a long term debt to total capitalization ratio of 0.582 in 2007, and then had an increasing tendency in the next two years, 0.633 in 2008 and 0.616 in 209. As the percentage gets higher, this means that a higher proportion of debt is used for the permanent financing for the firm as opposed to investor funds. As the proportion of debt gets higher from 362 million in 2008 to 3,417 million in 209, there are risks and the chance of bankruptcy.

From the above figures, we could see that over 3 years, this ratio of Dell has been much higher than HPs (almost twice). This means that Dell uses a lot of long term liabilities as a mean of permanent
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financing. However, while Dells ratio has been quite constant, HPs has increased remarkably, showing that HP has used more and more long term debt in their financing. The ratio is smaller for Dell on average. It shows long term debt counts less in its total capitalization. Combining with debt ratio calculated above, Dell borrows less than Acer but the ability to pay debt is lower. It means bad operating performance because amount to pay dividend to shareholders is quite stable. We should take more consideration the entire ratio before jumping to the conclusion.

3. Time interest earned ratio:

Dell 2007 2008 2009 8.889 23.806 14.67 HP 19.037 No interest 14.058 Acer 13.401 9.394 23.762

Dells ratio is quite high and increased a lot in 2008. It means that Dells uses of Debt in 2008 and 2009 were much more efficient than in 2007. In 2008, HP had no interest expenses. While Acer has an increasing trend of time interest ratio, both of Dell and HPs ratios decrease. It is true as the PC industry shows in 2009. Acer over passed Dell to achieve the 2nd position. Acer gained higher profit with lower expenses for time interest. Dell used loans from banks and through debt less ineffectively in comparison with its in 2007, 2008 and Acers 2009. One of the reasons is unqualified administrating. In 2009, Dell also must receive back goods delivered for under standard but delivered to customers.

III. Profitability:
1. Net Profit Margin Ratio
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The profit margin tells you how much profit a company makes for every $1 it generates in revenue. It evaluates the companys operational efficiency. Most companies agree the higher the profit margin against their competitors, the better for said companies. In examining the annual reports for Dell and taking the values necessary for 2007, 2008 and 2009, the net profit margin ratio for 2007 is 4.8 percent, for 2008 is 4.1 percent and that number for 2009 is 2.7 percent. There is a decrease in that figure in 2010 because of significant effects of global economic downturn starting from the second half of fiscal 2008. Especially, when Commercial customers are main ones of Dell, they cut off consumption dramatically during crisis, resulting in decreasing sales and net income. Doing business in the same industry, Dells competitors were also affected by economic downturn. Lets look at their net operating profit margin to evaluate how they were adapted in such difficult situation Dell 2007 2008 2009 4.8% 4.1% 2.7% HP 7% 7.1% 6.7% 2% 2.1% 2.7% Acer

Over 3 years, this ratio of Dell has been so much lower than HPs. It means that Dells ability to create income from sales is less than HPs. Besides, while ratio of Dell decreased, HPs increased in a bit in 2008. From the financial statements of these two companies over three years, we could see that the cost of products of HP is relatively lower than that of Dell (with the same revenue)(eg: in 2009, Dells revenue on products was $43697 mil and cost was $37534 mil while HPs were $74051 mil and $56503 mil). It means that the accessories and materials used in Dells products are more costly. This leads to their net income lower than HP relatively. However, by higher cost in producing their products, Dell could save the cost spending on their services (like after sales services or warranty because their products appear to be more durable). It is obvious that the ratio of Dell is twice as much as Acers. In PC market, Dell is more highly appreciated than Acers for its market brand. Dell also outstands because of its higher total assets. So the reason for achieving higher profit could but we cannot give an exact conclusion. In fact, Dells revenue in financial years decreased from $61.1 billion in 2007 to $52.9 billion in 2009. In 2010, net profit has decreased by a half of that in the beginning of the year. Decreasing in
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revenue is one of the smaller disasters in the 3 years. In 2007, a survey showed that Dell cheated on the report of financial statement which makes Dell redo all financial reports from 2003 to 2007. In 2008, EU and New York authorities sued Dell for colluding with Intel to create unfair advantages.

2. Return on asset

Investors want an assurance that the company in which they invest will efficiently manage their financial resources. One method of determining such efficiency is with the use of the return on asset ratio (ROA). Using the data from the annual report, Dell had a ROA of 10.7 percent in 2007 and 9.4 percent in 2008, but only 4.3 percent in 2009. Net income decreased year over year during fiscal 2009 by 42.2% to 1.4 billion. One reason is that Dell was impacted by significant decline in operating income and higher interest and other, net in fiscal 2009 compared to fiscal 2008. It also suffers from an increase in Dells effective tax rate to 29.2% from 25.4 %. Dell 2007 2008 2009 10.7% 9.4% 4.3% HP 8.2% 7.3% 6.7% Acer 5.1% 4.8% 3.9%

Both have decreased over 3 years. However, in 2007 and 2008, Dells ratio was much higher than HPs but in 2009 Dell had a serious drop.
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Be noted that in 2009, Dell total asset increased steadily while their net income dropped. All three companies had to bear negative effects from economic downturn so all had a decreasing trend from 2007 to 2009. In comparison to Acer, ROA of Dell Inc is still higher. However, it is a bad sign for Dell when its decreasing rate is highest. In 2009, the ROA is only by a half of that in 2008. Dells market share greatly drops. . In the end of 2009, Dell was the only PC producing at less volume, while HP. Acer, Lenovo, Apple or Sony achieved better. This result effected on its market share in the 3rd quarter which was 12,9% and lost the second largest PC in the world to Acer (13,4%), HP was still on the top of 19,9%. Recently, Dell had agreed to sell a brand to Foxconn. The transfer deal finished in the 2nd quarter of 2010 at the price of $300 million.

3. Return on Equity
The companys ROE is 78.9 percent in 2007 and 58.0 percent in 2008, and 25.4 percent in 2009. The ROE for Dell is quite high, which can be explained partly by its high debt ratio. Again, compared with 34.9% of the industry, Dells ROE is not relatively high. It can be explained by the decrease in net income recent years.

Dell 2007 2008 2009 78.9% 58.0% 25.4%

HP 18.9% 21.3% 18.9%

Acer 16.2% 14.1% 12.3%

Dells ratio has been higher than both Acer and HP over 3 years. However, while HPs and Acers ratio remained quite stably, Dell experienced sharp drop from 78.9% (2007) to 25.4% (2009). This can be explained by fall in net income in 2009 (from 2478 mil 2008 to 1433 mil 2009, nearly a half). ROE is an important ratio because a business that has a high return on equity is more likely to be one that is capable of generating cash internally, the higher a company's return on equity compared to its industry, the better. Dells ratio is higher but the decreasing rate is higher. The reason for this is due to selling shares at once of many
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investors at the end of 2009, which makes price shares decrease, and dividend to shareholders lower

IV. Operating efficiency ratio:

1. Operating profit margin:

Dell 2007 2008 2009 5.63% 5.22% 4.12% 8.4% 8.9% 8.9%

HP 2.6% 2.2% 2.2%

Acer

Dell ratio has decreased over 3 years while HPs increased. In addition, HP has had higher ratio through 3 years (8.7 on average while Dell 5.3). This ratio shows that operation of HP is more profitable than Dell (an attractive point of HP from investors point of view). In contrast, Dells operating profit margin is much better than that of Acer, revealing that Dell can extract more income from $1 of sales that Acer.

2. Total asset turnover:

Dell 2007 2008 2009 2.22 2.30 1.57 HP 1.17 1.04 0.99 1.9 2.244 1.972 Acer

Dells asset turnover is quite high, 2.218 in 2007, approximately 2.3 in 2008 and nearly 1.57 in 2009; compared with 1.1 of the industry and 0.8 of S&P 500. It means that from $1 investing in asset, Dell can
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generate around $1.57 from sales in 2010. Actually, in 2010, Dell made a decision to invest for further development by acquiring Perot System Corporation, expanding its service business. As a result, the revenue from such field grew in 2010. Moreover, the direct selling system of Dell helps this company save a lot of money spending on space of storage and showrooms (so save money on non current assets investment). Therefore, Dell has a much higher ratio than HP, on average. It shows that Dell uses of assets is much more efficient than HP However, the ratio is nearly the same between two corporate. However, in 2009 Dells ratio strongly decreases. Out of $1 invested in total assets, Acer generates $1.92 of sales while Dells is $1.57. It shows that Dell is less efficiency in using total assets than Acer in 2009

3. Non current asset turnover:

Dell 2007 2008 2009 7.959 9.624 5.624 2.517 1.915 1.833 HP Acer 8.945 9.575 9.742

Dells ratio is so high, so much higher than HPs. From the annual report, in 2009, Dell owned or leased total 19.7 millions square feet worldwide while HP owned or leased so high at level of 77 millions square feet (nearly 4 times). By using direct selling method, Dell could reduce a huge amount of money spending on leasing or buying space (belong to non current asset). It is so surprising at an extremely decreasing ratio in 2009 from Dell while Acer even increases. Using non current assets reduced efficiency. However, on August 27 in 2008, Acer acquired Gateway to increase competitive advantages based on economic scales. The new merge should be taken into account.
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4.

Operating income return on investment:

Dell Acer 0.051 0.050 0.042 HP 0.098 0.092 0.088

2007 2008 2009

0.125 0.12 0.081

From the figure above, it implies that Dell ability to extract income from $1 investment in asset has reduced from 2007 to 2009, from 12.5% to 8.1%.

From the figure above, it implies that Dell ability to extract income from $1 investment in asset has reduced from 2007 to 2009, from 12.5% to 8.1%. Especially, there is a quite sharp decrease in 2009. It can be explained by the effect of economic crisis, as mentioned above. In additional, in 2009, Dell acquired Perot System, leading to an increase in cost of production this year. It partly results in the decrease of net profit income. On average, the ratio of Dell is higher more twice than Acers and HPs. In other words, the possibility of generating profit from the assets employed in the business is higher than two competitors. However, investors should be careful because the trend of Dell's ration decreased gradually

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RECOMMENDATION
From the above analysis, we come to conclude that: 1. Dell has a strong liquidity, especially in comparison with two main competitors, namely HP and Acer. Its high current ratio and quick ratio implies the good ability to convert current asset into case for payment of due debt. It reduces the level of risk for investor. Its high inventory turnover is the result of direct selling method and highly efficient global supply chain. These specific features of Dell not only lower the inventory level but also increase the efficient use of and return on capital, which is one of investors concerns.

2. Dells leverage ratio is quite high. However, it is backed up by an

efficient use of debt for investment in asset. Recently, Dell has just broadened its market through a number of manufacturing locations around the world. To maintain its competitiveness, Dell continuously strives to improve its products, services, technology, manufacturing and logistics. Dell continues to invest in initiatives that will, on the one hand, align its new and existing products and services around customers need. However, it requires a lot of capital which makes Dells leverage ratio increase. Actually, long term debt to total capitalization ratio is quite high because its main funding is long term liability to finance for its long term and strategic development. Therefore, it can drive long term sustainable growth, profitability and liquidity.
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In short, investor shouldnt worry too much about Dells ability of going bankruptcy when they see its high leverage ratio

3. Operating efficient ratio In comparison with its competitors, Dells operating efficient ratios are in a good position. The total asset turnover implies its efficiency of using total asset to raise revenue while the operating profit margin is not really impressive.

4. Profitability: Although in 2009, Dell seems to be less profitable than its competitors, this company promises a very high potential to make large profit in the future. As mentioned in the previous section, there are a number of reasons for the decrease of profitability ratio of Dell recent years. Of them, we should take Dells investment to improve its manufacturing and quality of services into consideration. In 2009, it acquired Perot System Corporation, which expands its service business and better position for Dell through the sale of additional enterprise solutions. This company also invests resources in emerging countries like Brazil, India and China, where, given stable economic situation, we, investors, can expect significant growth over the next several years. From such conclusion about Dells profitability, liquidity, operating efficiency and leverage, we make a suggestion that shares of Dell are worthy to buy and invest.

APPENDIX
1. DELLs FINANCIAL STATEMENTS IN THE THREE MOST RECENT YEARS

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BALANCE SHEET

22

February 1, 2008 ASSETS Current assets: Cash and cash equivalents .................................................. Short-term investments ....................................................... Accounts receivable, net ..................................................... Financing receivables, net ................................................... Inventories, net ................................................................... Other current assets ........................................................... Total current assets ..................................................... Property, plant, and equipment, net ................................... Investments ........................................................................ Long-term financing receivables, net. ................................ Goodwill ............................................................................. Purchased intangible assets, net .......................................... Other non-current assets ............................................... Total assets.................................................................... ........... LIABILITIES AND EQUITY Current liabilities: Short-term debt .................................................................... Accounts payable ................................................................ Accrued and other ................................................................ Short-term deferred service revenue .................................... Total current liabilities ............................................. $ 225 11,492 4,323 2,486 18,526 $ 7,764 208 5,961 1,732 1,180 3,035 19,880 2,668 1,560 407 1,648 780 618 $ 27,561

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Long-term debt .................................................................... Long-term deferred service revenue .................................... Other non-current liabilities ..................................... Total liabilities ................................................ Commitments and contingencies (Note 10) Redeemable common stock and capital in excess of $.01 par value; shares issued and outstanding: 0 and 4, respectively (Note 4) ........ Stockholders equity: Preferred stock and capital in excess of $.01 par value; shares authorized: 5,000; shares issued and outstanding: none .. Common stock and capital in excess of $.01 par value; shares authorized: 7,000; shares issued: 3,338 and 3,320, respectively; shares outstanding: 1,944 and 2,060, respectively Treasury stock at cost: 919 and 785 shares, respectively Retained earnings ..................................................................... Accumulated other comprehensive income (loss) ........ Total stockholders equity .................................................. Total liabilities and equity .................................................

362 2,774 2,070 23,732

94

10,589

(25,037) 18,199 (16) 3,735 $ 27,561

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INCOME STATEMENT

STATEMENT OF CASH FLOWS

25

26

2. ACERs FINANCIAL STATEMENTS IN THE THREE MOST RECENT YEARS

BALANCE SHEET

3.

27

28

CASHFLOW

29

INCOME STATEMENT

30

31

32

33