Dell’s Company Financial Analysis

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Dell is among the largest computer manufacturers around the globe. The corporation has been recording tremendous growth since its initiation in 1984. It has a direct model, which plays a significant role in its success. The model offers fast, affordable, and customer-friendly methods of both production and distribution. Additionally, Dell conducts varying functions including designing, developing, manufacturing, marketing, and supporting repairs of information technology systems. The company manufactures differing products such as laptops, desktops, servers, printers, storage devices, computer peripherals, and software products among others. It also offers consulting services. The corporation has a wide network of sales representatives, using indirect channels and telephone-based sales. The corporation is beneficial to health care centers, educational institutions, large corporations, governments, small enterprises, and individual consumers among others. This paper provides credible information based on Dell Company in the electronic industry.

History of Dell

Michael Dell founded Dell Corporation in 1984 with the main aim of serving customers directly. Initially, Michael referred to the corporation as PC limited at the time he was studying at the University of Texas. In 1985, Dell manufactured its first computer named “Turbo” with an eight-megahertz processor. While manufacturing the system, the main aim of the corporation was to implement an IBM-compatible personal computer system. The corporation had a consumer-oriented focus whereby it allowed customers to customize their computers as they placed their orders. In the first year of its business, the company made a gross income of 73million dollars making it go public in 1988. In 1996, Dell began selling its products and services using their websites and after three years, it was performing well compared to other competitors such as Compaq. The company implemented its first printer in 2003 in order to serve the public as well as average consumers and businesses. The printers were versatile and easy to use. In particular, the corporation specializes in offering solutions such as servers, networking, and storage products among others. The server and networking portfolio within the company consists of the rack, blade, and tower server. At the end of the period, the company had started offering conventional configurable information technology and business services. It values its customers hence providing them with support enterprise installation and warranty services among others. Notably, the company deals with financial services. The company provides a critical financial provision to its U.S. clients and beyond. This is a vital provision in the context of business and other financial obligations. The services provided incorporates originating, collecting, and servicing customer receivables. In the present day, the firm has managed to initiate novel technologies by embracing teamwork throughout the workforce. Its main competitors include the soft Choice Corporation, CDW Corporation, Apple Inc., Sony, and Toshiba Corporation among others.

Dell’s Mission

Dell’s mission is to ensure optimal application of all resources when offering high-quality products and services, as well as having a high-quality customer experience with the best value. It also aims at becoming the most successful computer company all around the globe by offering the best-customized products. They intend to meet the expectations of their customers that entail providing high-quality products and services, applying leading technology, competitive pricing, and flexible customization capability among others.

Dell’s vision

Dell’s vision is to offer structurally and functionally efficient computers to visually impaired people around the globe. It also intends to satisfy its customers fully to be the most successful computer company by applying the newest technology and loyal customers.

Dell’s SWOT analysis

Dell’s SWOT analysis considers its internal Strength and Weaknesses as well as the environmental Opportunities and Threats that affect the firm. It is essential to the corporation because it supports the managers in coming up with a quick overview of the company’s strategic situation. As a result, it enables the corporation in determining its current position and resources that it has and lacks. For example, the Strength assessment specializes in identifying what the corporation practices well such as skilled professionals and modern facilities. The weakness highlights what the company is not capable of performing well, which acts as a hindrance to its effectiveness.

Additionally, the opportunity analysis draws attention to what an organization can put effort into to improve its performance. For example, enhancing socialization among community members as well as taking advantage of the available resources. However, threat analysis considers the environmental factors that are likely to interfere with the corporation’s performance. These might include the increase in the demand for services as well as high legislative mandates. Therefore, SWOT analysis is significant to dissimilar organizational issues such as population growth and industrialization as well as internal issues such as the ongoing workforce. Below is the SWOT analysis for Dell Corporation.

Key strengths

A high percent of Dell’s strength results from the Direct Model. Therefore, this makes the model be the greatest asset of the corporation. Some of the advantages that the model entails include the fact that it permits consumers to customize their laptops fully. This is imperative because the current market is gaining more knowledge making consumers prefer products that target their needs.

The corporation’s strength also falls in its inventory turnaround time as well as the good relationship that it has with its suppliers. The features that the corporation uses in making its products are cost-effective thus passing it on to its customers, resulting in customized and low-priced computers. It has a good relationship with large companies and the government that facilitates its success. It is among the largest manufacturers of computers and the famous computer brands around the globe. This has facilitated its competitiveness globally thereby elevating it to apposition of marker leadership. Precisely, the strengths of Dell are based on a number of factors. Firstly, it derives its strength from the fact that it is a well-established technological company with business operations spread all over the world. It also operates in a number of profitable markets both locally and internationally. This implies that it is in a better position to get lots of profits from its operations to expand even more globally. Another factor that contributes to the strength of Dell is a strong government support that it has.


Dell has some weaknesses when it comes to targeting the student segment of its market because 5% of the corporation’s revenue originates from educational institutions. Compared to the total business customers that Dell has, it has an inadequate relationship with the educational institutions. However, most students are currently purchasing their computers through schools but Dell has not taken advantage of the market. The company does not allow the purchasers to see or touch the products that they want to buy. Despite the advantages that Dell’s Direct Model offers, the customers are not able to visit the retail, analyze the products that they want and purchase them within a single trip. This makes it risky because most purchasers are not comfortable with buying products without analyzing them. Finally, the company has an inappropriate business relationship with computer retailers around the globe. Another weakness of Dell lies in their being a feeble competitor. The company can easily get weakened by the activities of its competitors. Dell believes that the partnership between other organizations would deluge the available market with their capabilities. This could force Dell to considerably minimize most of its operations locally and internationally. It can even lead to worse effects on the company. Dell faces competition from other firms such as Soft Choice Corporation, CDW Corporation, Apple Inc., Sony, and Toshiba Corporation among others. Just recently, the value of Dell shares is reduced due to losses it estimates that it can experience on transnational markets. The losses are caused by the competition from its opponents. This shows that Dell is not able to withstand stiff completion offered by its competitors.


People are purchasing more personal computers from Dell at an extremely increasing pace. This had made Dell’s laptop market increase rapidly compared with the desktops. This has offered the company an opportunity to grow compared to its competitors. The company has been maintaining its excellent lead initiated by Michael Dell the founder. It has also expanded into the government and education markets. However, Dell has several opportunities. Most of the opportunities of Dell are in its strengths as well as its weaknesses. Since Dell has several profitable business opportunities locally and internationally, it can be able to earn more profits than its competitors. Therefore, it is in a better position to make its services better and grow even more. With the government support that Dell has, they are able to change their policies and strategies to suit their business environment. Dell can also be able to lobby support from the Foreign Investment Review Board to look into the Dell sale act. If this act is reviewed, Dell will have a good opportunity for fair competition within the industry. This can allow Dell to merge with other companies hence competing favorably with other competitors. In addition, Dell Company can also change its management provisions. This will provide it with a better opportunity to develop good strategies and policies to enable its prosperity.


Dell encounters many threats in its business due to the ever-changing nature of the computer industry. Nature is challenging the corporation to implement high-quality products and sell them at a lower price in a faster and more efficient way to handle the high competition in the market. The price difference between Dell products is getting smaller. This is turning out to be a key threat to the corporation. Consequently, Dell is famous for benefiting the customers because it is cost-effective. However, many other competitors are finding different ways of dealing with the issue by ensuring that they also offer long savings to their clients. The major threat of Dell Company is contributed by the operations of its competitors. The company believes that this would reduce its operations in a number of its profitable markets. Due to this threat, the company opts to seek the support of the government and the opposition to help in stopping this plan and other business threats. The competition faced by the company also leads to a fall in the shares of the company. According to the company’s management, there could even be more serious consequences of these competitions.

Factors that influence its growth

As noted, Dell Company has been recording exemplary performance over the years. Its financial reports depict an upward trend in terms of growth, expansion, and productivity. That is the company records a vibrant capital base, it has high-value assets and its debt portfolio has been in reducing end. It also holds viable future growth initiatives. The company’s exemplary performance since its inception is attributable to various factors. The factors that range from operating synergies to environmental, economic, and social elements have been instrumental in shaping its growth path. Indeed, these factors hold the potential of stalling or advancing performance in any setting. Therefore, their effective integration is vital for any institution that seeks to expand its operations. They are also instrumental in achieving competitiveness, especially in the current dynamic business environment.

As indicated, the company’s internal factors that have been driving its performance include good leadership, strategic operating policies, and an effective organizational structure. The company also has qualified personnel, strong processing guidelines, and quality infrastructural support systems. These systems guide operations in its business units. In particular, strong and dedicated leaders who execute their duties with immense determination administer the company. They perform their duties diligently to ensure that the corporation achieves its core mission and objectives. The leaders offer effective coordination of activities, supervision, and allocation of resources.

These contribute to the reduction of wastage of resources due to poor utilization. The effective use of resources has been the reason behind the corporation’s rapid growth since the available resources are injected to finance expansion plans. The company also has effective and efficient infrastructural setups that steer the development of highly recommended products. Its products are of unquestionable quality and performance capacity. This has seen most individuals globally embrace them over other institutions’ electronic devices. For instance, its computers are well known and recommended since they are of excellent quality. Consumers also affirm that the products contribute immensely to enhancing their social and commercial dealings.

The corporation also operates under an effective organizational structure that promotes democracy and communication. The structure seeks to eradicate bureaucratic systems of operations that delay the execution of activities. In the review of its external competencies, the company has an effective product distribution network that aids the delivery of its PCs to consumers. It has strong marketing policies and work plans that contribute to enhancing awareness of its products. It also has strong product brands and qualified personnel that facilitate innovation through the continuous formulation of creative designs. Indeed, these elements form the key factors that have been propelling the company to its current performance levels and growth.

Price movement studies “S & P” Benchmark”

Price movement is an element that is determined by the implications of the production cost of an item. It defines the performance level in accompany since it influences consumers towards purchasing items. That is consumers assess the price level or tags of various commodities when making purchasing decisions. This explains why price movement or levy is significant in driving performance. Institutions should adopt a systematic price movement that is justifiable and sustainable. The price should adopt a steady increase if need be but should be proportional to the cost incurred in the production process. This is critical since institutions base their performance on or achieve returns from sales that are made.

Imperatively, managers such as Dell corporation administrators should factor in the cost of production before setting prices of various products. This is to ensure that they remain in business and generate profit for the company’s sustainability. Pricing of products is an element that is used as a benchmark for performance in most settings including Dell Corporation. It shows how well or badly the cost of operation is affecting an institution. It also affects the level of profit or financial inflow since high pricing is not attractive to consumers. However, favorable prices attract more purchasers hence leading to high returns. Dell Corporation was founded with a strong mission to be the global distributor of electronic products such as computers has been considering the price issue with diligence.

The company is keen on levying favorable price value of its items to facilitate sales and to meet its objectives. This has seen the company manage its production sequence with quality and innovative ideas to mitigate the cost of production. This is to enable levying of favorable prices that do not drive consumers away or give competitors an unwarranted advantage. Indeed, the company’s pricing strategy has been effective since it offers consumers a better option with no compromise to quality. The strategy has been one of the key drivers to its excellent performance and growth that has been remarkable.

Financial analysis

Financial ration analysis and short-term cash balance projections

Financial or accounting ratios are the basic indicators that accountants and various individuals evaluate when assessing the level of performance in institutions. The ratios give clear comparative values that hold credibility in decision-making. The ratios that are commonly used in evaluating performance include liquidity ratio, acid test ratio (ATR), debt collection ratio, and current ratio. These ratios are computed using the figures that are realized in the financial statements. They show the level of growth or reduction in terms of performance that help managers in decision-making. An institution is said to have appositive performance if its major ratios record appositive index. That is if the ratio for the current period is higher than the previous ratings and record appositive trend.

Indeed, Dell Company’s performance ratios have been recording positive growth since its inception. The ratios depict how well the management of the corporation applies basic principles of financial administration. Its quarterly reports have been showing appositive increase except for the fourth quarter that shows a slight decrease. However, the company is still on course to achieving exemplary performance according to the financial projections. Its strong asset base that stands at US$44,533 and capital structure that has appositive growth depicts this. The elements that form the key determinants to the value of performance ratios explain the growth potential that is eminent in the company. In particular, Dell’s current ratio that shows the balance between assets and liabilities has been recording growth despite having a slight drop in the fourth quarter. This is attributable to its effective management of resources, expansion of the asset base, and control of liabilities.

The current ratio stands at 1. 40 in the third quarter and 1. 34 in the fourth quarter. The drop is attributable to the laxity of the management of accounts payable and a slight increase in expenditure obligations. However, the company’s future projections show positive advancement in terms of the current ratio since the management is to correct the imbalance. The company’s quick ratio stands at 1. 33 and 1. 27 for the third and fourth quarters respectively. Cash conversion cycle stands at 31 days and 36 days for the respective quarters under review while days for accounts payable collection records an increase from 84 days to 89 days. As noted, the institution’s slight reduction in performance especially in quarter four in terms of ratio strengths has been due to laxity on accounts payable collection. Inferior expenditure management for the period that recorded an increase from $33,380 to $35,616 has also caused it. However, future cash projections give immense hope since it projects to expand its operations and further report systematic growth. Therefore, the company is still on the right path to recording high performance as indications are in the cash projection board.

Risk analysis

Risks are evident issues that hold the capacity of compromising performance in diverse settings. Risks occur in institutions due to inferior financial management, allocation of resources, formulation of debt collection periods, and poor development of working plans. In this regard, the key risks that threaten to impede performance in Dell Company that requires effective mitigation include allocation of resources and minimization of expenditure. The company risks recording low performance as evident in its fourth-quarter report if it fails to reduce its expenditure. It must develop viable modalities to ensure that its expenditure is proportional to its capacity and that it does not affect the consistency of cash inflow. Therefore, the company must adopt quality performance techniques to ensure that its performance remains high. This is by mitigating the evident risks within the process of operation.

Evaluation of the company’s assets and liability management

A review of the company’s asset and liability administration shows that there is a systematic growth in terms of asset capacity. That is the company’s asset base is ever increasing since its inception due to effective investment. It has various investment ventures and performance policies that are founded under the core mission to enhance its liquidity capacity. Its investments are on current and fixed assets. The assets contribute to the production process and execution of various activities in its business units. The assets also foster the delivery of quality products that meets consumer specifications. In particular, Dell’s asset base is valued at US$44,533 in comparison to its liability obligation that stands at US$42,043.

The assets support its operations and are the key resources that facilitate its performance. Consequently, the company’s expenditure obligation has not been exceeding its asset base or value. Critically, institutions that seek to record substantive performance levels should ensure effective administration of resources. They should minimize cost implications through the adoption of lean management techniques. The company’s liability stands at US$35,616 shows how effectively its administrators manage the available resources. This is due to the fact it has not surpassed the asset value despite recording an increase in comparison to the third quarter’s expenditure rate that stood at US$20,219.

The company’s financial strength and Capital capacity

Dell’s financial strength and operating guidelines are well developed under strong performance initiatives. This has enabled the institution to record exemplary capital capacity and management of its debts. The institution has limited debt obligations that enable it to divert its resources in advancing the quality of the computers that it manufactures. This has also enhanced its equity financing capacity that is dependent on the percentage variance between inflows and outflows. Institutions that ensure effective administration of cash outflows and inflows hold the capacity to upscale their investment portfolio and in turn enhance equity sources of finance. This element is a crucial aspect that has steered the institution to its current position. It has strong investments that contribute to its equity finances with low expenditure on debts. The electronic producing corporation must adopt quality operating techniques to enable it to regain its performance momentum that was lost in the fourth quarter.


Indeed, the growth in Dell Company is attributable to the increasing demand for electronic products especially personal computers (PCs) globally. The demand has created the need for high production of electronic equipment in most institutions. This explains Dell’s growth path that is driven by a core mission to provide quality products that hold the capacity of enhancing human activities. As noted, the growth in the electronic industry plays a fundamental role in transforming an individual’s lifestyle. This is because the equipment facilitates communication that enhances social engagement between individuals. Technologically enabled systems also facilitate the execution of complex tasks that require technical support in institutions. This explains the significance of technology and the industry in facilitating economic performance in most nations. Indeed, the electronic industry requires a proper revolution to facilitate the production of key equipment such as computers, phones, and LCD screens that are used for various purposes. On pricing, the company is keen on levying favorable price value of its items to facilitate sales and to meet its objectives. This has seen the company manage its production sequence with quality and innovative ideas with an aim of mitigating the cost of production. This is to enable levying of favorable prices that do not drive consumers away or give competitors an unwarranted advantage.

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