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

Required:

a. Compute the following analytical measures applied to Dell Inc. for 2005.

(1) Average total life span of plant and equipment.

(2) Average age of plant and equipment.

(3) Average remaining life of plant and equipment.

b. Discuss the importance of these ratios for analysis of Dell.

Financial Statement of Dell Inc.:

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(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.... FISCAL YEAR ENDED January 28, Percentage January 30, Percentage 2005 Change 2004 Change % of net revenue. $49,205 $ 9,015 18.3% $4,761 Operating income.. % of net revenue. 8.6% Tax provision before repatriation charge...... $ 1,122 % of income before income taxes. 9.7% $ 4,254 25.2% $ 280 6.3% $1,402 31.5% $3,043 6.2% 19% 19% 19% 20% 15% $41,444 17% $ 7,552 19% 18.2% $ 4,008 9.7% $ 3,544 $ 8.6% $1,079 29.0% $1,079 29.0% $ 2,645 6.4% 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%