Using Financial Reports: Analyzing the Balance Sheet Recent balance sheets of Dell, Inc., a leading producer and

Question:

Using Financial Reports: Analyzing the Balance Sheet

Recent balance sheets of Dell, Inc., a leading producer and marketer of a broad range of personal computers, mobility products, software, and related tools and services, are provided.

Required:

1. Is Dell a corporation, sole proprietorship, or partnership? Explain the basis of your answer.

2. Use the company's balance sheet (consolidated statement of financial position) to determine the amounts in the accounting equation (A = L + SE) at the end of the most recent year.

3. Calculate the company's current ratio on January 30, 2009. Interpret the ratio that you calculated. What other information would make your interpretation more useful?

4. Give the journal entry the company will make in 2009 when it pays its fiscal year 2008 accounts payable (fiscal year 2008 ends on January 30, 2009).

5. Does the company appear to have been profitable over its years in business? On what account are you basing your answer? Assuming no dividends were paid, how much was net income (or net loss) in the most recent year? If it is impossible to determine without an income statement, stateso.

DELL INC. Consolidated Statements of Financial Position (dollars in millions) January 30, 2009 February 1, 2008 ASSETS C

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...