1) How was Dell's working capital policy a competitive advantage? Dell compared to Compaq. Advantages of Dell's efficient working capital. Advantages/Disadvantages to small components inventory. 2) How did Dell fund the 52% growth in 1996? Projected Balance Sheet at Year-End 1995 Ratios Revenue Growth/Margins Paste A1 = = avau + Days Supply of Inventory (DSi)a = = Dov BIU x fx Table A A 1 Table A Days Supply of Inventory (DSI)" 19936 3 4 1994 33 1995 32 Dell Computer 55 5 6 Apple Computer 52 54 8 Compaq Computer 9 10 IBM 48 12 Source: Dell Computer Corporation Fiscal 1993-1996 Annual Reports; case writer estimates from Apple Computer Compaq Computer, and 13 IBM Fiscal 1992-1994 Annual Reports 14 DSI = (Net Ending Inventory) (Quarterly COGS/90 Days) "Dall's fiscal calendar ends in January, Apple's in September; Compaq and IBM's in December. The DSi for 1996 represents Dall's Si for the 15 quarter ended on 1/29/95, Apple's on 9/30/94, and Compac's and IBM's on 12/31/94 Arial VA A Paste B IU A A A1 x fx Exhibit 1 Dell's annual worldwide sales dollar growt CD E Exhibit 1 Dell's annual worlwide sales dollar growth versus industry. 1 3 Calendar Year 4 1991 5. 1992 6 1993 7 1994 8 1995 Delia 63% 126% 43% 21% 52% Industry -2% 7% 15% 37% 31% 9 Source: Dell Computer Corporation Fiscal 1996 Annual Report case writer estimates from 10 industry market share data from International Data Corporation 11 12 "Dell's fiscal year closest in alignment to calendar year stated.