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    Dell's working capital policy gave it a competitive advantage by reducing inventory costs. In 1996, Dell funded 52% sales growth through positive cash flow without debt. To fund 50% sales growth in 1997, Dell could reduce working capital needs or increase profit margins. It could take steps like optimizing inventory levels or improving supply chain management. If Dell also purchased stock and repaid debt in 1997, it would need to pursue external funding or more aggressive steps to fund growth internally.

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    Dell's working capital policy gave it a competitive advantage by reducing inventory costs. In 1996, Dell funded 52% sales growth through positive cash flow without debt. To fund 50% sales growth in 1997, Dell could reduce working capital needs or increase profit margins. It could take steps like optimizing inventory levels or improving supply chain management. If Dell also purchased stock and repaid debt in 1997, it would need to pursue external funding or more aggressive steps to fund growth internally.

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    4 views1 page

    Questions To Assignment

    Uploaded by

    omer1431
    Dell's working capital policy gave it a competitive advantage by reducing inventory costs. In 1996, Dell funded 52% sales growth through positive cash flow without debt. To fund 50% sales growth in 1997, Dell could reduce working capital needs or increase profit margins. It could take steps like optimizing inventory levels or improving supply chain management. If Dell also purchased stock and repaid debt in 1997, it would need to pursue external funding or more aggressive steps to fund growth internally.

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    Dell s Working Capital

    Assignment 1

    By: Muhammad Nadeem

    Questions to assignment
    1. How Dell wass working capital policy a competitive advantage? 2. How did Dell fund its 52% growth in 1996? 3. Assume Dells sales will grow 50% in 1997, how might the company fund this growth internally? How much would working capital need to be reduced and/or profit margin increased? What step do you recommend the company take? 4. How would your answer to question 3 changes if Dell also purchased $ 500 million of common stock in 1997 and repaid its long term debt?

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