1. Annual Report Annual Report El mostafa Achar El mostafa Achar ACG2021,section002 ACG2021,section002

2. Executive Summary Dell is the leading company in technology around the world. At the end of 2004 Dell had a revenue of $41,4 billion, a cash flow from operations of more than $3,7 billion, ending the year with a gross cash and investments balance of $11,9 billion. Dell is the leading company in technology around the world. At the end of 2004 Dell had a revenue of $41,4 billion, a cash flow from operations of more than $3,7 billion, ending the year with a gross cash and investments balance of $11,9 billion. In 2004 Dell had a gross profit of $7,552 millions and a net income of$2,645. In 2004 Dell had a gross profit of $7,552 millions and a net income of$2,645. http://www1.euro.dell.com/content/topics/global.aspx/corp/investor/en/sec_reports?c=e u&l=en&s=corp

3. Introduction Michael s. dell (Chairman and Chief Executive Officer) Michael s. dell (Chairman and Chief Executive Officer) The home office is located in Round rock, Texas. The home office is located in Round rock, Texas. Latest fiscal year ended on January 30, 2004 Latest fiscal year ended on January 30, 2004

4. Introduction Dell its direct business model-designs, develops, manufactures, markets, sells, and supports a wide range of computer systems and services that are customized to customer requirements. Dell its direct business model-designs, develops, manufactures, markets, sells, and supports a wide range of computer systems and services that are customized to customer requirements. Main geographic area of activity: Americas, Europe, and pacific-Japan. Dell it has office and manufacturing space in approximately 41 countries. Main geographic area of activity: Americas, Europe, and pacific-Japan. Dell it has office and manufacturing space in approximately 41 countries.

5. Audit Report Auditors: price waterhouse Coopers LLp, Austin, Texas Auditors: price waterhouse Coopers LLp, Austin, Texas The auditors explained what is their function. They have to make sure all financial statements are free of mistakes. They have to examine all the statements and check the amounts and disclosures. They said that the financial statements from Dell Company are correct at January 30, 2004. The auditors explained what is their function. They have to make sure all financial statements are free of mistakes. They have to examine all the statements and check the amounts and disclosures. They said that the financial statements from Dell Company are correct at January 30, 2004.

6. Stock Market Information Most recent price of the company’s stock: 03/02/2006 : $29.56 Twelve month trading range of the company’s stock: $28.62-$41.99 From the graphic we can see that the stock price is going down. This is not the best time to sell stocks unless the price is going more down, so I think it’s time to buy and hold.

7. Industry Situation and Company Plans Dell is a trusted and diversified information-technology supplier and partner, and sells a comprehensive portfolio of products and services directly to customers worldwide. Dell, recognized by Fortune magazine as America's most admired company and No. 3 globally, designs, builds and delivers innovative, tailored systems that provide customers with exceptional value. Dell is a trusted and diversified information-technology supplier and partner, and sells a comprehensive portfolio of products and services directly to customers worldwide. Dell, recognized by Fortune magazine as America's most admired company and No. 3 globally, designs, builds and delivers innovative, tailored systems that provide customers with exceptional value. Dell’s mission is to be the most successful computer systems and services company in the world by delivering the best customer experience in the markets they serve. To accomplish this objective, Dell has developed a comprehensive business strategy that emphasizes maximizing long-term stockholder value through superior financial performance, quality and customer and employee satisfaction. Dell’s mission is to be the most successful computer systems and services company in the world by delivering the best customer experience in the markets they serve. To accomplish this objective, Dell has developed a comprehensive business strategy that emphasizes maximizing long-term stockholder value through superior financial performance, quality and customer and employee satisfaction.

8. Income Statement The format of the income statement is multi-step. The format of the income statement is multi-step. Gross profit has increased from 2003 to 2004 this means they sold more products on 2004 due to effective cost management and cost reductions Gross profit has increased from 2003 to 2004 this means they sold more products on 2004 due to effective cost management and cost reductions Income from operations increased on 2004 this means they spend less money on operations Income from operations increased on 2004 this means they spend less money on operations Net income increased from 2003 to 2004 Net income increased from 2003 to 2004 In millions 20032004 Gross Profit $6,349$7,552 Income from Operations 2,8443,544 Net Income 2,122$2,645

9. Balance Sheet Cash and cash equivalents increased by $85millions from 2003 to 2004. Cash and cash equivalents increased by $85millions from 2003 to 2004. Total Assets increased by $3,841 millions Total Assets increased by $3,841 millions Accounts payable increased by $1,327 millions Accounts payable increased by $1,327 millions Current assets increased by $1,709 million Current assets increased by $1,709 million In million s Total Assets = Total Liabilities + Stockholders’ Equity 2003 $ 15,470 = $ 10,597 + $ 4,873 2004 $ 19,311 = $ 13,031 + $ 6,280

10. Statement of Cash Flow Cash flow from operations are more than net income for the past two years. Cash flow from operations are more than net income for the past two years. The company is growing through investing activities such as buying property, plant and equipment. The company is growing through investing activities such as buying property, plant and equipment. The primary financing source for dell are stock sales. The primary financing source for dell are stock sales. Cash has increased over the past two years on 2004 there was a cash ending balance of $4,317 millions, and in 2003 there was a cash ending balance of $4,232 millions. Cash has increased over the past two years on 2004 there was a cash ending balance of $4,317 millions, and in 2003 there was a cash ending balance of $4,232 millions.

11. Accounting Policies Revenue recognition: revenue is recognize when persuasive evidence of a sales arrangement exists, delivery occurs or services are rendered, the sales price is fixed or determinable and collectibles is reasonably assured. Revenue recognition: revenue is recognize when persuasive evidence of a sales arrangement exists, delivery occurs or services are rendered, the sales price is fixed or determinable and collectibles is reasonably assured. Cash and cash equivalents: dell classifies investments as cash equivalents if the maturity of an investment is 3 months or less from the purchase date. Cash and cash equivalents: dell classifies investments as cash equivalents if the maturity of an investment is 3 months or less from the purchase date. Investments: dell’s investments in debt securities and publicly traded equity securities are classified as available for sale and are reported at fair market value using the specific identification method. Investments: dell’s investments in debt securities and publicly traded equity securities are classified as available for sale and are reported at fair market value using the specific identification method. Inventory: is valued at the lower of the cost or market, with cost computed on a first-in, first-out basis. Inventory: is valued at the lower of the cost or market, with cost computed on a first-in, first-out basis. Property, Plant and equipment: is stated at cost less accumulated depreciation. dell adopted the straight-line method of depreciation. Property, Plant and equipment: is stated at cost less accumulated depreciation. dell adopted the straight-line method of depreciation.

12. Accounting Policies Topics of the notes to the financial Statements. Summary of significant accounting policies Summary of significant accounting policies Financial instruments. Financial instruments. Income Taxes Income Taxes Capitalization Capitalization Benefit plans Benefit plans Dell financial services Dell financial services Commitments, contingencies, and certain concentrations Commitments, contingencies, and certain concentrations Segment information Segment information Supplemental consolidated financial information Supplemental consolidated financial information Unaudited quarterly results Unaudited quarterly results

13. Financial Analysis Liquidity Ratios 20032004comments Working Capital ($9)($263) Current assets increased from 2003 to 2004 making the working capital decrease. Current Ratio 1.97 Dell has $1 of current assets for each $2.00 of current liabilities for both years. Receivable turnover 11.39 times 13.3times The receivable turnover increased for 2004. The receivables were turned into cash 13.3 times during 2004. Average days sale 32.0427.44 The time to collect the accounts receivable decreased to 27.44 days. Inventory turnover 91.8107.08 Dell’s average inventory was sold 107,08 times during 2004. Average days inventory on hand 3.983.41 It takes 3,41 days to sell the inventory on hand. This number decreased in comparison to 2003.

14. Financial Analysis Profitability Ratios 20032004comments Profit Margin 0.060.06 On each dollar of net sales, Dell made 6.0 cents on 2004. Asset turnover 2,032,38 Dell produces $2,38 in sales for each $1.00 invested in average total assets on 2004. Return on Assets 0,120,14 For each dollar invested, Dell assets generated 14 cents on 2004. Return on equity 0,380,47 Dell earned 47.0 cents for every dollar invested by stockholders on 2004.

15. Financial Analysis Solvency Ratio 20032004Comment Debt to Equity 2,172,07 Dell has decreased from 2003 to 2004 by 0,10 times

16. Financial Analysis Market Strength Ratios Price/earnings per share=20.05 times Dividend yield= none