Refer to the financial statements of Dell Inc. in Appendix A.

Required:

a. Compute the following ratios for 2005:

(1) Long-term debt to equity.

(2) Total debt ratio.

(3) Total debt to equity.

(4) Cash from operations to long-term debt.

(5) Equity capital to net property, plant and equipment.

b. Discuss your overall impression of the solvency of Dell Inc., citing examples as appropriate.

Financial Statements of Dell Inc.:

Transcribed Image Text:

(dollars in millions) Net revenue. Gross margin. % of net revenue. Operating expenses... % of net revenue. Tax repatriation charge... % of Income before income taxes. Income tax provision. % of Income before income taxes... Net income. % of net revenue. January 28, Percentage 2005 Change $49,205 $ 9,015 18.3% Operating income.. % of net revenue 8.6% Tax provision before repatriation charge......$ 1,122 % of income before income taxes 25.2% $ 4,761 9.7% $ 4,254 $ 280 6.3% $1,402 31.5% $ 3,043 6.2% 19% 19% 19% 20% FISCAL YEAR ENDED 15% January 30, Percentage 2004 Change $41,444 $ 7,552 18.2% $ 4,008 9.7% $ 3,544 8.6% $ 1,079 29.0% $ 1,079 29.0% $ 2,645 6.4% 17% 19% 14% 25% 25% January 31, 2003 $35,404 $ 6,349 17.9% $ 3,505 9.9% $ 2,844 8.0% $ 905 29.9% $ 905 29.9% $2,122 6.0%