1. What has happened to Dell's liquidity position over the past 3 years? How does Dell's liquidity compare with that of its peers?
2. Take a look at Dell's inventory turnover ratio. How does this ratio compare with that of its peers? Have there been any interesting changes over time in this measure? Do you consider Dell's inventory management to be a strength or a weakness? Explain.
3. Construct a DuPont analysis for Dell and its peers. What are Dell's strengths and weaknesses compared to those of its competitors?
Your tutorial shows Dell's current ratio, inventory turnover and DuPont return on ...
Your tutorial shows Dell's current ratio, inventory turnover and DuPont return on assets (return on sales and asset turnover) for 2009, 2010 and 2011. These ratios are compared to the same ratios for HP and IBM, Dell's peers. The comparisons are discussed in a paragraph in Excel. See attached for computations and discussion.
Single Spreadsheet Entries Analyzed
NOTE: In your explanation, show that you understand the major concepts.
1. Using ratio analysis, compare two major competitors selling soft drinks: the Coca Cola Co. and Pepsico, Inc. Create a single spreadsheet with appropriate entries for all questions. There are 3 separate financial statements to analyze:
a. the income statement,
b. the balance sheet, and
c. the cash flow statement.
To answer these questions you may obtain information from the web directly from:
• the companies using their annual report;
• from financial information from Yahoo, MSN or other service; or
• from the Securities and Exchange Commission at their EDGAR web site, www.sec.gov.
2. Look for the 10-K, annual reports or link to the SEC documents from one of the financial sites. Calculate these ratios for the last 3 fiscal years.
Note: Whenever you use balance sheet items to calculate ratios, be sure to average the beginning-of-year and end-of-year amounts.
3. What can you tell from your analysis? What are the strengths and weaknesses of each company? If you had $10,000 to invest, would you rather purchase the common stock of the Coca Cola Co. or Pepsico, Inc.? Give your reasons.