NEAR EAST UNIVERSITY

Faculty of Economics and Administrative Sciences

Department of Banking and Finance

DELL TECHNOLOGIES INC. FINANCIAL REPORT

Financial Management Project

By

PETER OLUWASEGUN IGUNNU

STUDENT NO: 20235097

Lecturer:

MUMTAZ ALI

Nicosia

December, 2023.
 CHAPTER 1

INTRODUCTION
Through its subsidiaries, Dell Technologies Inc., an American global technology business, offers
hardware, software, and service solutions for information technology. The September 2016
combination of Dell and EMC Corporation resulted in its formation (which subsequently became
Dell EMC).
Dell Technologies Inc. (Dell) has two business segments: Client Solutions Group (CSG) and
Infrastructure Solutions Group (ISG). The ISG sector provides traditional and next-generation
storage solutions, including all-flash arrays, scale-out file systems, object platforms, hyper-
converged infrastructure, and software-defined storage, in addition to rack, blade, tower, and
hyperscale servers. This section offers associated software and peripherals, support and
deployment, configuration, and extended warranty services in addition to networking equipment
and services. These facilitate the modernization and transformation of business customers'
infrastructure, improve end-user experiences, and expedite corporate applications and
procedures. The CSG division provides workstations, laptops, displays, docking stations, and
other devices in addition to third-party software and peripherals. It also provides support and
deployment, configuration, and extended warranty services. In addition, the business delivers
infrastructure-as-a-service solutions, generates, collects, and manages customer finance
agreements, and resells VMware products and services. Additionally, the business offers
cybersecurity technology-driven security solutions to stop security lapses, find malicious
behavior, react fast to security breaches, and recognize new threats.
The company designs, develops, manufactures, markets, offers, and supports IT infrastructure,
which includes workstations, laptops, desktop computers, mobile devices, storage devices,
software, and cloud solutions. Products are sold under the Alienware, SecureWorks, Dell,
Pivotal, and Dell EMC brands. Dell creates, gathers, and manages client receivables financing
agreements in addition to offering a range of financial services related to the use of its hardware,
software, and service solutions. Dell provides services to small and medium-sized enterprises,
the government, corporations, educational institutions, law enforcement agencies, and healthcare
organizations. The corporation operates across the Middle East, Africa, Europe, Asia-Pacific,
and the Americas.
 CHAPTER 2

BACKGROUNG, VISION, MISSION AND PRODUCTS

BACKGROUND
Innovative PCs, servers, software, and other tech solutions are the hallmarks of Dell
Technologies Inc., a global technology firm. Initially established at a University of Texas at
Austin dorm room, the firm was founded in 1984 by Michael Dell. Prior to gaining popularity for
its direct-to-consumer sales approach that let clients personalize their computer systems, Dell
started off selling updated PCs.
Dell grew in size and stature in the international technology industry as it continued to enhance
its product line. Creating Dell Technologies Inc. in 2016, Dell united with the global data storage
business EMC Corporation. Dell was able to diversify its offerings with this transaction,
providing businesses with a wide variety of IT infrastructure, hardware, software, and services.
SecureWorks, VMware, Pivotal, Dell, Dell EMC, RSA Security, and other divisions and
companies make up Dell Technologies. The firm specializes on cloud computing, cybersecurity,
corporate solutions, and personal PCs. With a focus on innovation, sustainability, and customer-
centric solutions, Dell Technologies is able to keep up with the ever-changing technological
world.

VISION
Dell Technologies enables nations, localities, clients, and individuals worldwide to use
technology for their own prosperity. Clients rely on Dell Technologies Inc. to provide them with
technological solutions that enable them to do more at home, at business, in the classroom, or
anywhere else in the globe.

MISSION
Dell Technologies is a distinctive family of companies that assists businesses and people in
creating their digital future and revolutionizing their work, play, and living environments.
Offering a wide range of cutting-edge technology and services from edge to core to cloud, the
firm offers its clients the most extensive and inventive portfolio in the market. Dell Technologies
Inc. place a high priority on ethics, innovation, teamwork, and their customers.
PRODUCTS
Dell Technologies Inc. offers a wide range of products and solutions catering to both individual
consumers and businesses. Some of their key product categories include:
1. Personal Computers: Dell manufactures laptops, desktops, 2-in-1s, and workstations
designed for various user needs, from everyday use to high-performance computing.
2. Servers and Networking: Dell provides a comprehensive range of servers, networking
equipment, and infrastructure solutions to support data centers and IT environments.
3. Storage Solutions: The company offers storage solutions ranging from traditional storage
arrays to software-defined storage and cloud-based storage options, addressing the data
management needs of businesses.
4. Software and Security: Dell Technologies owns and develops various software solutions,
including operating systems, data protection software, virtualization software (VMware),
and cybersecurity products.
5. Cloud Computing and Services: They provide cloud services and consulting to help
businesses migrate, manage, and optimize their cloud environments effectively.
6. Peripherals and Accessories: Dell manufactures and sells a variety of computer
peripherals and accessories, such as monitors, keyboards, mice, printers, and more.
7. Enterprise Services: Dell offers consulting, support, and managed services to assist
organizations in optimizing their IT infrastructure and operations.
Additionally, through subsidiaries like VMware, RSA Security, Pivotal, and SecureWorks, Dell
Technologies extends its offerings to virtualization, security solutions, software development,
and cybersecurity services.
The company continues to innovate and adapt its product offerings to meet the evolving needs of
consumers and businesses in the technology space.
 CHAPTER 3

RATIO ANALYSIS
LIQUIDITY RATIO
The capacity of a business to settle its short-term debt commitments is assessed using a liquidity
ratio. The current ratio, quick ratio, and cash ratio are the three primary liquidity ratios.

 Current Ratio
Dell's current ratio from 2021 to 2023. A liquidity ratio that gauges a business's capacity to meet
short-term commitments is called a current ratio.

YEAR 2021 2022 2023

CURRENT RATIO 0.804828937 0.800758777 0.819897781

2021: The current ratio was 0.8048, indicating that for every dollar of short-term liabilities, the
company had approximately $0.80 in short-term assets.
2022: The current ratio was 0.8008, implying that for every dollar of short-term liabilities, the
company had around $0.80 in short-term assets.
2023: The current ratio is 0.8199, which means that for every dollar of short-term liabilities, the
company has approximately $0.82 in short-term assets. This indicates a slight improvement
compared to the previous year.

Currrent Ratio
0.825

0.82

0.815

0.81

0.805

0.8

0.795

0.79
1 2 3
In all three years, the current ratio is less than 1, suggesting that the company might face
challenges in using its current assets to cover its short-term obligations.

 Acid Test Ratio

Acid test ratio for Dell (DELL) from 2021 to 2023, both current and historical. An acid test ratio
is a liquidity ratio that indicates how well a company can use its most liquid assets to cover its
current obligations.

YEAR 2021 2022 2023

ACID TEST RATIO 0.741982561 0.695705609 0.727436404

2021: The acid-test ratio was 0.742, indicating that for every dollar of short-term liabilities, the
company had around $0.74 in highly liquid assets available to cover these obligations.
2022: The acid-test ratio decreased slightly to 0.696, suggesting that for every dollar of short-
term liabilities, the company had approximately $0.70 in highly liquid assets available.
2023: The acid-test ratio improved to 0.727, indicating that for every dollar of short-term
liabilities, the company had about $0.73 in highly liquid assets available.

Acid Test Ratio

0.75
0.74
0.73
0.72
0.71
0.7
0.69
0.68
0.67
1 2 3

Similar to the current ratio interpretation, these values being below 1 suggest that the company
might face challenges in meeting its short-term obligations using only its most liquid assets.
  Cash Ratio
Current and historical cash ratio for Dell (DELL) from 2021 to 2023. Cash ratio is a liquidity
ratio that illustrates how much cash or cash equivalent a company has available to cover its
current obligations.

YEAR 2021 2022 2023

CASH RATIO 0.262340205 0.168801097 0.166627947

2021: The cash ratio was 0.262, indicating that for every dollar of short-term liabilities, the
company had approximately $0.26 in cash and cash equivalents available to cover these
obligations.
2022: The cash ratio decreased significantly to 0.169, suggesting that for every dollar of short-
term liabilities, the company had around $0.17 in cash and cash equivalents available.
2023: The cash ratio remained relatively stable at 0.167, indicating that for every dollar of short-
term liabilities, the company had about $0.17 in cash and cash equivalents available.

Cash Ratio
0.3

0.25

0.2

0.15

0.1

0.05

0
1 2 3

Similar to the interpretations of the current ratio and acid-test ratio, these values being less than 1
indicate that the company might face challenges in covering its short-term obligations using only
cash and cash equivalents.
LEVERAGE RATIO
A group of measures that illustrate a company's financial leverage in relation to its equity,
liabilities, and assets are collectively referred to as "leverage ratios." They demonstrate the
proportion of an organization's capital that is derived from debt, providing a reliable indicator of
the viability of a company's financial commitments.

 Debt-to-Equity
Current and historical debt to equity ratio values for Dell (DELL) from 2021 to 2023. A
company's financial leverage is measured by dividing its total debt by the equity held by
investors, which is known as the debt/equity ratio.

YEAR 2021 2022 2023

DEBT-TO-EQUITY 16.26025076 -15.99643917 -9.477258168

2021: The debt-to-equity ratio was 16.26, indicating that for every dollar of equity, the company
had $16.26 in debt. This suggests a relatively high level of debt compared to equity.
2022: The ratio is shown as negative, which is unusual and could be an anomaly or an error in
the data. Negative values in the debt-to-equity ratio typically imply that the company has more
equity than debt. It's important to verify the accuracy of this data point.
2023: The ratio decreased further and is negative again, suggesting an even greater proportion of
equity relative to debt. Again, negative values might signal an anomaly or an unusual financial
situation that needs validation.

Debt-to-Equity
20
15
10
5
0
1 2 3
-5
-10
-15
-20
The negative values in the debt-to-equity ratio for 2022 and 2023 could be due to various
reasons, such as a significant increase in equity, a decrease in debt, or data reporting issues.

 Debt-to-Total Assets
Current and historical debt to Total assets ratio values for Dell (DELL) from 2021 to 2023. The
debt/total assets ratio Shows the percentage of the firm’s assets that are supported by debt
financing.

YEAR 2021 2022 2023

DEBT-TO-T.ASSETS 0.388802009 0.29089457 0.330182678

2021: The debt-to-total-assets ratio was 0.389, suggesting that approximately 38.9% of the
company's total assets were financed by debt.
2022: The ratio decreased to 0.291, indicating a lower proportion of debt financing the
company's assets, dropping to about 29.1% of total assets.
2023: The ratio increased slightly to 0.330, meaning around 33% of the company's total assets
were funded by debt.

Debt-to-Total Assets
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
1 2 3

The trend here suggests that the company reduced its reliance on debt financing from 2021 to
2022 but slightly increased it again in 2023. Lower debt-to-total-assets ratios generally indicate
less financial risk associated with debt, as the company has a lower dependency on borrowed
funds to finance its assets. Conversely, higher ratios suggest a higher level of debt financing
relative to the company's total assets.

 Total Capitalization Ratio

Current and historical Total Capitalization ratio values for Dell (DELL) from 2021 to 2023. The
total capitalization ratio shows the relative importance of long-term debt to the long-term
financing of the firm.

YEAR 2021 2022 2023

TOTAL CAP. RATIO 1.076526148 1.386094827 1.487357362

2021: A Total Capitalization Ratio of 1.0765 suggests that the company's total debt accounted
for approximately 107.65% of its total capitalization. This might imply that the company had
more debt than the total value of its capitalization during this period. This could be an unusual
scenario and might need further clarification or context.
2022: The ratio increased to 1.3861, indicating that the total debt represented about 138.61% of
the company's total capitalization. This signifies an even higher proportion of debt compared to
the company's total capitalization, possibly indicating increased reliance on debt financing.
2023: The ratio further increased to 1.4874, suggesting that the company's total debt accounted
for approximately 148.74% of its total capitalization. This indicates a continued trend of higher
debt relative to the company's total capitalization.

Total Capitalization Ratio

1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
1 2 3
Given that total capitalization ratio exceeds 100%, its therefore implies that the company's debt
is greater than its total capitalization, which might raise concerns about the company's financial
structure and its ability to manage and service its debt obligations.

TURNOVER RATIOS
Turnover ratio is a measurement of efficiency, indicating the length of time it takes a business to
sell the goods that it has spent money up front to acquire.

 Receivable Turnover
Current and historical Receivables Turnover ratio values for Dell (DELL) from 2021 to 2023.
The receivables turnover ratio indicates quality of receivables and how successful the firm is in
its collections.

YEAR 2021 2022 2023

REC. TURNOVER 5.25129577 5.621743236 5.639215038

2021: The receivables turnover ratio was 5.25, indicating that the company collected payments
from its customers approximately 5.25 times during the year. This suggests that, on average, it
took about 69 days (365 days / 5.25) to collect payments from customers.
2022: The ratio increased to 5.62, which means the company improved its efficiency in
collecting payments. It collected payments from customers around 5.62 times during the year,
suggesting a faster collection cycle. On average, it took about 65 days (365 days / 5.62) to collect
payments.
2023: The ratio remained relatively stable at 5.64, indicating a consistent trend in efficiently
collecting payments. The company collected payments approximately 5.64 times during the year,
with an average collection period of around 65 days (365 days / 5.64).
 Receivable Turnover
5.7

5.6

5.5

5.4

5.3

5.2

5.1

5
1 2 3

A higher receivables turnover ratio generally indicates better efficiency in collecting payments
and a shorter average collection period. This efficiency is positive as it allows the company to
convert its accounts receivable into cash more rapidly, potentially improving its cash flow and
liquidity.

 Inventory Turnover
Current and historical Inventory Turnover ratio values for Dell (DELL) from 2021 to 2023. The
inventory turnover ratio indicates the effectiveness of the inventory management practices of the
firm.

YEAR 2021 2022 2023

INVE. TURNOVER 19.04967666 13.44625297 16.66980737

2021: The inventory turnover ratio was 19.05, indicating that the company sold and replaced its
inventory approximately 19.05 times during the year. This suggests a high turnover rate, which
could imply efficient inventory management. On average, the inventory turnover cycle was about
19 days (365 days / 19.05).
2022: The ratio decreased to 13.45, implying that the company had a lower turnover of inventory
compared to the previous year. It sold and replaced its inventory approximately 13.45 times
during the year, with an average inventory turnover cycle of around 27 days (365 days / 13.45).
2023: The ratio increased to 16.67, indicating an improvement in inventory turnover compared to
2022. The company sold and replaced its inventory approximately 16.67 times during the year,
with an average inventory turnover cycle of about 22 days (365 days / 16.67).

Inventory Turnover
25

20

15

10

0
1 2 3

A higher inventory turnover ratio generally indicates more efficient management of inventory,
faster sales, and lower carrying costs. However, a very high ratio might suggest low inventory
levels, which could lead to stockouts or missed sales opportunities. On the other hand, a lower
ratio might indicate overstocking or slow-moving inventory.

 Total Assets Turnover

Current and historical Total Assets Turnover ratio values for Dell (DELL) from 2021 to 2023.
The total assets turnover ratio indicates the overall effectiveness of the firm in utilizing its assets
to generate sales.

YEAR 2021 2022 2023

T. ASSETS TURNOVER
0.763472836 1.092144314 1.141612079

2021: The Total Assets Turnover ratio was 0.763, indicating that the company generated revenue
equal to 76.3% of its average total assets during the year. This implies that the company
generated less revenue in relation to its asset base.
2022: The ratio increased to 1.092, suggesting an improvement in the company's efficiency in
utilizing its assets to generate revenue. It generated revenue approximately 109.2% of its average
total assets during the year.
2023: The ratio further increased to 1.142, indicating continued improvement in the company's
efficiency in generating revenue from its asset base. It generated revenue approximately 114.2%
of its average total assets during the year.

Total Asset Turnover

1.2
1
0.8
0.6
0.4
0.2
0
1 2 3

An increasing Total Assets Turnover ratio signifies better efficiency in utilizing assets to
generate revenue. The company improved its ability to generate more sales or revenue in relation
to its asset base over these years, which is generally considered positive as it indicates improved
asset utilization and operational efficiency.

PROFITABILITY RATIO
Profitability ratios assess a company's ability to earn profits from its sales or operations, balance
sheet assets, or shareholders' equity. They indicate how efficiently a company generates profit
and value for shareholders.

 Gross Profit Margin

Current and historical Gross Profit Margin values for Dell (DELL) from 2021 to 2023. The gross
profit margin indicates the efficiency of operations and firm pricing policies.

YEAR 2021 2022 2023

GROSS P. MARGIN
0.312202836 0.216320642 0.221757363

2021: The Gross Profit Margin was 0.3122, indicating that for every dollar of revenue, the
company retained approximately $0.31 after accounting for the cost of goods sold. This suggests
a gross profit margin of 31.22%.
2022: The margin decreased to 0.2163, indicating that the company retained around $0.22 of
profit for every dollar of revenue, implying a gross profit margin of 21.63%.
2023: The margin slightly increased to 0.2218, suggesting that the company retained
approximately $0.22 for every dollar of revenue, indicating a gross profit margin of 22.18%.

Gross Profit Margin

0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
1 2 3

A higher gross profit margin generally indicates better profitability, as the company is retaining a
larger portion of its revenue after accounting for the cost of goods sold. The decreasing trend
from 2021 to 2022 might suggest challenges in managing costs or pricing strategies impacting
profitability. However, the slight increase in 2023 might indicate an improvement in managing
costs or a change in sales mix that positively affected profitability.

 Net Profit Margin

Current and historical Net Profit Margin values for Dell (DELL) from 2021 to 2023. The net
profit margin indicates the firm’s profitability after taking account of all expenses and income
taxes.

YEAR 2021 2022 2023

NET PRO. MARGIN

0.034492274 0.047412473 0.023870734

2021: The Net Profit Margin was 0.0345, indicating that for every dollar of revenue, the
company retained approximately $0.0345 as net profit, implying a net profit margin of 3.45%.
2022: The margin increased to 0.0474, suggesting that the company retained around $0.0474 of
profit for every dollar of revenue, resulting in a net profit margin of 4.74%.
2023: The margin decreased to 0.0239, indicating that the company retained approximately
$0.0239 of profit for every dollar of revenue, representing a net profit margin of 2.39%.

Net Profit Margin

0.05
0.045
0.04
0.035
0.03
0.025
0.02
0.015
0.01
0.005
0
1 2 3

A higher net profit margin indicates that the company is more efficient in translating its revenue
into profit after considering all expenses. The decreasing trend from 2022 to 2023 might suggest
increased expenses or a decline in revenue that impacted overall profitability.
 Return on Investment (ROI)
Current and historical Return on Investment (ROI) values for Dell (DELL) from 2021 to 2023.
The return on investment (ROI) indicates the profitability on the assets of the firm (after all
expenses and taxes).

YEAR 2021 2022 2023

ROI
0.026333914 0.051781262 0.027251119

2021: The ROI was 0.0263, suggesting that for every dollar invested, the company gained
approximately $0.0263 in profit. This represents a return of 2.63% on the investment.
2022: The ROI increased to 0.0518, indicating that for every dollar invested, the company gained
around $0.0518 in profit, resulting in a return of 5.18% on the investment.
2023: The ROI decreased to 0.0273, suggesting that for every dollar invested, the company
gained approximately $0.0273 in profit, representing a return of 2.73% on the investment.
 Return on Investment (ROI)
0.06

0.05

0.04

0.03

0.02

0.01

0
1 2 3

The ROI measures the efficiency of an investment and how effectively it generates profit. The
fluctuation in ROI over these years indicates variations in the returns generated relative to the
initial investment.

 Return on Equity
Current and historical Return on Equity (ROE) values for Dell (DELL) from 2021 to 2023. The
return on equity (ROE) indicates the profitability to the shareholders of the firm (after all
expenses and taxes).

YEAR 2021 2022 2023

ROE
1.101321586 -2.847477745 -0.782190903

2021: The ROE was 1.1013, indicating that the company generated a profit of approximately
$1.1013 for every dollar of shareholders' equity. This represents a return of 110.13% on
shareholders' equity.
2022: The ROE is shown as negative (-2.8475), which suggests that the company's net income
might have been negative or that the shareholders' equity might have decreased substantially.
This negative ROE indicates a loss or a situation where the net income is insufficient to cover
shareholders' equity.
2023: The ROE remains negative (-0.7822), indicating that the company's net income might still
be negative or insufficient to cover shareholders' equity. This suggests that the return generated
from shareholders' equity is still negative.

Return on Equity (ROE)

1.5
1
0.5
0
1 2 3
-0.5
-1
-1.5
-2
-2.5
-3
-3.5

Negative ROE can be a concern as it implies that the company is not generating enough profit
relative to the shareholders' equity, potentially signaling financial difficulties or inefficiencies in
operations.
 CHAPTER 4

CONCLUSION
The company's financial standing seems to indicate inconsistent success in many areas:
Liquidity Ratios:
 Current Ratio & Quick Ratio: The business continuously has ratios lower than 1,
suggesting that it could be difficult to satisfy short-term commitments using just current
assets.
Leverage Ratios:
 Debt-to-Equity & Debt-to-Total-Assets: These ratios showed varying trends. While the
Debt-to-Equity ratio had negative values in 2022 and 2023 (which might need
clarification), the Debt-to-Total-Assets ratio decreased from 2021 to 2022 before slightly
increasing in 2023. This suggests fluctuations in the company's reliance on debt.
Efficiency Ratios:
 Receivables Turnover & Inventory Turnover: Both ratios showed fluctuating trends but
generally improved from 2021 to 2023, indicating better management of receivables and
inventory.
Activity Ratios:
 Total Assets Turnover: This ratio increased over the years, suggesting improved
efficiency in generating revenue from total assets.
Profitability Ratios:
 Gross Profit Margin: This declined initially but showed a slight increase in 2023.
 Net Profit Margin: There was an increase from 2021 to 2022 followed by a decrease in
2023.
 Return on Investment (ROI): This fluctuated, indicating variations in returns generated
from investments.
 Return on Equity (ROE): ROE showed a positive figure in 2021 but turned negative in
2022 and 2023, signaling potential challenges in generating profits from shareholders'
equity.
In summary:
 The organization had difficulties with liquidity, as seen by persistently low current and
quick ratios.
 Leverage ratio fluctuations show changing dependence on debt throughout time.
 Although asset turnover, inventories, and receivables were managed more effectively,
profitability ratios exhibited inconsistent patterns.
 A negative return on equity (ROE) in 2022 and 2023 indicates that the corporation had
difficulty turning a profit on shareholders' equity.
These diverse patterns point to possible instability in the financial system, especially with respect
to profitability and liquidity.

Suggestion:
1. Enhance Liquidity Management: In light of persistently low liquidity ratios,
concentrate on cash flow-boosting tactics, better working capital management techniques,
and inventory level optimization as means of assuring improved liquidity.
2. Stabilize Debt Structure: To preserve financial stability, address the varying debt ratios
by assessing the company's debt structure, exploring refinancing alternatives, and making
sure that debt use is approached in a balanced manner.
3. Boost Profitability: To increase profitability, address decreasing profit margins by
examining pricing strategies, evaluating cost structures, and identifying areas where
operational efficiency may be improved.
4. Strengthen Financial Efficiency: While increases in asset turnover are a good thing,
make sure that efficiency benefits are long-lasting by keeping a close eye on operational
procedures and making the most use of available resources.
5. Put Shareholder Value First: In order to turn around negative ROE trends, given top
priority to plans that will increase shareholder value. These plans may include increasing
revenue, implementing cost-cutting initiatives, or making well-timed investments that
will pay off.
 6. Comprehensive Financial Assessment: To find the underlying causes of the varying
ratios and take systematic action against them, conduct a comprehensive assessment of
the financial statements, operational procedures, and market circumstances.
7. Strategy Planning: To match short-term goals with long-term sustainability and
development, create a solid strategy plan taking the financial ratios' insights into account.
8. Professional Expertise: Take into account hiring consultants or financial specialists to
carry out a thorough financial study and provide customized development suggestions.

By concentrating on these areas, the business may strive to increase profitability, fortify its
financial stability, and guarantee long-term sustainable development.