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Annual Report

Annual Report. DELL. El mostafa Achar ACG2021,section002. Executive Summary.

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Annual Report

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  1. Annual Report DELL El mostafa Achar ACG2021,section002

  2. Executive Summary Dell is the leading company in technology around the world. At the end of 2004 Dell had a revenue of $41,4 billion, a cash flow from operations of more than $3,7 billion, ending the year with a gross cash and investments balance of $11,9 billion. In 2004 Dell had a gross profit of $7,552 millions and a net income of$2,645. http://www1.euro.dell.com/content/topics/global.aspx/corp/investor/en/sec_reports?c=eu&l=en&s=corp

  3. Introduction • Michael s. dell (Chairman and Chief Executive Officer) • The home office is located in Round rock, Texas. • Latest fiscal year ended on January 30, 2004

  4. Introduction • Dell its direct business model-designs, develops, manufactures, markets, sells, and supports a wide range of computer systems and services that are customized to customer requirements. • Main geographic area of activity: Americas, Europe, and pacific-Japan. Dell it has office and manufacturing space in approximately 41 countries.

  5. Audit Report • Auditors: price waterhouse Coopers LLp, Austin, Texas • The auditors explained what is their function. They have to make sure all financial statements are free of mistakes. They have to examine all the statements and check the amounts and disclosures. They said that the financial statements from Dell Company are correct at January 30, 2004.

  6. Stock Market Information • Most recent price of the company’s stock: 03/02/2006 : $29.56 • Twelve month trading range of the company’s stock: $28.62-$41.99 • From the graphic we can see that the stock price is going down. This is not the best time to sell stocks unless the price is going more down, so I think it’s time to buy and hold .

  7. Industry Situation and Company Plans • Dell is a trusted and diversified information-technology supplier and partner, and sells a comprehensive portfolio of products and services directly to customers worldwide. Dell, recognized by Fortune magazine as America's most admired company and No. 3 globally, designs, builds and delivers innovative, tailored systems that provide customers with exceptional value. • Dell’s mission is to be the most successful computer systems and services company in the world by delivering the best customer experience in the markets they serve. To accomplish this objective, Dell has developed a comprehensive business strategy that emphasizes maximizing long-term stockholder value through superior financial performance, quality and customer and employee satisfaction.

  8. Income Statement • The format of the income statement is multi-step. • Gross profit has increased from 2003 to 2004 this means they sold more products on 2004 due to effective cost management and cost reductions • Income from operations increased on 2004 this means they spend less money on operations • Net income increased from 2003 to 2004

  9. Balance Sheet • Cash and cash equivalents increased by $85millions from 2003 to 2004. • Total Assets increased by $3,841 millions • Accounts payable increased by $1,327 millions • Current assets increased by $1,709 million

  10. Statement of Cash Flow • Cash flow from operations are more than net income for the past two years. • The company is growing through investing activities such as buying property, plant and equipment. • The primary financing source for dell are stock sales. • Cash has increased over the past two years on 2004 there was a cash ending balance of $4,317 millions, and in 2003 there was a cash ending balance of $4,232 millions.

  11. Accounting Policies • Revenue recognition: revenue is recognize when persuasive evidence of a sales arrangement exists, delivery occurs or services are rendered, the sales price is fixed or determinable and collectibles is reasonably assured. • Cash and cash equivalents: dell classifies investments as cash equivalents if the maturity of an investment is 3 months or less from the purchase date. • Investments: dell’s investments in debt securities and publicly traded equity securities are classified as available for sale and are reported at fair market value using the specific identification method. • Inventory: is valued at the lower of the cost or market, with cost computed on a first-in, first-out basis. • Property, Plant and equipment: is stated at cost less accumulated depreciation. dell adopted the straight-line method of depreciation.

  12. Accounting PoliciesTopics of the notes to the financial Statements. • Summary of significant accounting policies • Financial instruments. • Income Taxes • Capitalization • Benefit plans • Dell financial services • Commitments, contingencies, and certain concentrations • Segment information • Supplemental consolidated financial information • Unaudited quarterly results

  13. Financial Analysis Liquidity Ratios

  14. Financial AnalysisProfitability Ratios

  15. Financial AnalysisSolvency Ratio

  16. Financial AnalysisMarket Strength Ratios

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