Given the table of DELL's Debt-to-equity ratios = Total debt/total shareholders equity Years Total debt Total equity
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Given the table of DELL's Debt-to-equity ratios = Total debt/total shareholders equity
Years | Total debt | Total equity | Debt-to-equity ratios |
2019 | 52,056 | 3155 | 16.4995 |
2020 | 47,984 | 7,553 | 6.3530 |
2021 | 26,954 | -1580 | -17.0595 |
2022 | 29588 | -3025 | -9.7812 |
2023 | 25,994 | -2,309 | -11.2577 |
Given Dell's Table of Times Interest earned
Times interest earned= (Net Income + Interest expense + Income tax expense)/ interest expense
Years | Net income | Interest expense | Income tax expense | Times interest earned |
2019 | 4,616 | 2675 | -5533 | (0.32) |
2020 | 3,250 | 2389 | 165 | 35.18 |
2021 | 5,563 | 1542 | 981 | 8.24 |
2022 | 2,442 | 1222 | 803 | 5.56 |
2023 | 3,211 | 1501 | 692 | 7.81 |
- Related to debt-to-equity ratios. How has the proportion of debt financing and equity financing changed over the years? (Compared to the average in the market). Is the corporation experiencing favorable or unfavorable financial leverage?
- This is related to the times interest earned ratio question. (Compared to the market average) What does your calculation indicate about the corporation's risk?
- Based on the above analysis, how would you conclude the corporation's default risk and profitability, and how would you recommend to the corporation's CEO?
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