Corporate analysis



Corporate analysis

Q1) Calculation of Debt to equity ratio

Debt to equity ratio (2013) = Total debt/shareholders equity

= 9085/10680

= 0.85

Debt to equity ratio (2013) = Total debt/shareholders equity

= 9254/8917

= 1.03

Explanation of difference

Dell Inc over the last year has able to reduce the debt to equity ratio to 0.85 from 1.03. This slight decrease indicates that firms equity percentage is more than debt, and that it has managed t reduce the risk level of the company (Dell, 2013). Meanwhile, this decrease indicates that company posse's sufficient equity for future investment.

Q2)

For last two fiscal years, Dell Inc total debt is around 9085 in 2013, and 9254 in 2012.Company in last two years have classified $2542 (1618+924) long-term debt as part of current. On the other hand, Del Inc during the last fiscal year has able to decrease the total debt of the company by $169 million, primarily because the company was able to pay off $400 million in maturing of senior notes, and company also witnessed a considerable decrease in the debt financing structure.

The decrease of $169 million is extremely significant for the company, as with that they have able to increase the equity financing, thus limiting the risk, and eliminating the probability of bankruptcy. In year 2013, $400 million debt was matured, this shows that company are able to pay of considerable amount of senior notes every years, and the management of the company is planning to continuing the cycle for considerable period.

Q3)

Dell Company leases property, plant, equipment, manufacturing facilities, and office space under non-cancellable operating lease (Dell, 2013). As per February 2013 future lease payment amount for next five years under these type of non-cancelable lease are. In year 2014, company is planning to pay $137 million, similarly in year 2015 is planning to ...