Florida National University Instructor: Michelle Estevez ACG2003 – Principles of Accounting
Final Project – Dell and Toshiba Financial Analysis August 6, 2013
Financial analysis provides the clear view and picture of the performance parameters of an organization. It helps in analyzing and comparing the present as well past performance. This analysis is an important tool for the management, investors as well as the outsiders who deal with organization. This analysis shows the way of functioning and the direction in which an organization is moving.
There are different ways through which one can analyze the financial statements which includes Ratio analysis, comparative analysis as well as common size statements. In this paper we will do the financial analysis of Dell and Toshiba.
Dell was founded by Michael Dell in his University of Texas–Austin dorm room in 1984 based on a simple business model: eliminating the retailers from the sales channel and selling directly to customers. By using this model to deliver customized systems to customers with lower-than-market-average prices, Dell soon started to enjoy business success, joining the ranks of the top-five computer system makers worldwide in 1993, and became Number 1 in 2001. With three major manufacturing facilities in the United State (Austin, Texas; Nashville, Tennessee; Winston-Salem, North Carolina) and facilities in Brazil, China, Malaysia, and Ireland, Dell’s revenue for the last four quarters totaled $56 billion. Dell employs 65,200 people worldwide. (About Dell Computers, 2012)
In addition to personal computers, Dell’s current product offerings include a variety of consumer electronics: workstations, servers, storage, monitors, printers, handhelds, LCD TVs, projectors, and so forth. Some of these products are manufactured by Dell factory associates; other products are manufactured by other companies but sold under the Dell brand. (About Dell Computers, 2012)
Throughout the company’s history, Dell’s fundamental business model has not changed: selling directly to customers has become Dell’s key strategy and strength. The direct business model includes no retailers and starts and ends with the customer: a customer orders online or via phone a computer system according to his preferred configuration, Dell manufacturers this computer system, and Dell ships directly to the customer. Dell has been able to keep manufacturing costs lower than competitors’ costs because it not only saves money by shipping directly to customers, but it also only builds to order, so raw material inventory is low. The direct model also reduces the time from customer order to receipt of the system. Moreover, the direct model provides a single point of accountability so Dell can more easily design its customer service model in order to provide the necessary resources to satisfy its customers.
Dell is a manufacturer of computers, laptops, servers, storage devices, networking products, notebook computers, desktop computer systems, printing and imaging systems, software and peripherals. It is mentioned under the product category ‘Dell designs, develops, manufactures, markets, sells, and supports a wide range of products that are customized to customer requirements. These include enterprise systems, client systems, printing and imaging systems, software and peripherals. (About Dell Computers, 2013)
Toshiba is a diversified manufacturer of electronic and electrical products. The company has a strong market position in various markets in which it operates. Toshiba's strong market position not only provides it with a competitive advantage but also enhances its bargaining power. However, intense competition can adversely affect the company's market share.
Toshiba is one of the world’s largest manufacturers,