Working Capital, ROE, ROI, Liquidity and Profitability

Case 3.18
LO 3, 4, 6, 7
Analysis of liquidity and profitability measures of Dell Inc. The following data (amounts in millions) are taken from the January 30, 2009, and February 1, 2008, comparative financial statements of Dell Inc., a direct marketer and distributor of personal computers (PCs) and PC-related products:

. 102

At February 2, 2007, total assets were $25,635 and total stockholders' equity was $4,328.
a. Calculate Dell, Inc.'s, working capital, current ratio, and acid-test ratio at January 30, 2009, and February 1, 2008. Round your ratio answers to two decimal places.
b. Calculate Dell's ROE for the years ended January 30, 2009, and February 1, 2008. Round your ratio answers to two decimal places, and your percentage answers to one decimal place.
c. Calculate Dell's ROI, showing margin and turnover, for the years ended January 30, 2009, and February 1, 2008. Round your ratio answers to two decimal places and your percentage answers to one decimal place.
d. Evaluate the company's overall liquidity and profitability.
e. Dell, Inc., did not declare or pay any dividends during the years ended January 30, 2009, or February 1, 2008. What do you suppose is the primary reason

Case 4.26
LO 6, 7
Capstone analytical review of Chapters 2-4. Calculate liquidity and profitability measures and explain various financial statement relationships for an excavation contractor Gerrard Construction Co. is an excavation contractor. The following summarized data (in thousands) are taken from the December 31, 2010, financial statements:

At December 31, 2009, total assets were $82,000 and total owners' equity was $32,600. There were no changes in notes payable or paid-in capital during 2010.
Required:
a. The cost of services provided amount includes all operating expenses (selling, general, and administrative expenses) except depreciation expense. What do you suppose the primary reason was for management to separate depreciation from other operating expenses? From a conceptual point of view, should depreciation be considered a "cost" of providing services? p. 145
b. Why do you suppose the amounts of depreciation expense and interest expense are so high for Gerrard Construction Co.? To which specific balance sheet accounts should a financial analyst relate these expenses?
c. Calculate the company's average income tax rate. (Hint: You must first determine the earnings before taxes.)
d. Explain why the amount of income tax expense is different from the amount of income taxes payable.
e. Calculate the amount of total current assets. Why do you suppose this amount is so low, relative to total assets?
f. Why doesn't the company have a Merchandise Inventory account?
g. Calculate the amount of working capital and the current ratio at December 31, 2010