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1992

1993

1994

1995

890
608
282
215
67
7
23
51

2014
1565
449
310
139
4
41
102

2873
2440
433
472
-39
0
-3
-36

3475
2737
738
489
249
-36
64
149

Operating Assets

1995

1996

1997
40%

1997
50%

Total Assets
Short Term Investments
Total Operating Assets

1594
484
1110

2148
591
1557

2257.65

2413.35

Sales
COGS
Gross Profit
Operating Expense
Operating Income
Finance & Other Income
Income Taxes
Net Profit

Average Age of Inventory DSI


Average Collection Period DSO
Average Paying Period DPO

34.5
47
40.25
1994

Cash
Inventory
Accounts Receivable
Accounts Payable
Net Working Capital
Changes in Net Working Capital
Net Profit
Retained Earning Beginning
Required Funds

43
293
538
403
471

1996
55
429
726
466
744
273
272
311
161

45%

1997
55%

55
746.3096
1279.124
905.1945
1175.24
431.2395
320.28
311

55
827.3654
1417.409
999.7597
1300.01
556.0147
342.9
311

543.96 646.115

In 1997, Dell Net Profit and RE can not cover its working capital. So, in order to funding its work
internally, they need to adjust their working capital by,
(1) Speeding up the turnover of Inventory, (2) Speeding up the collectin of working capital, and (3
payment of accounts payable as long as possible
Current

Proposed
55%
34.5
29
30
47
39
40
40.25 40.69894 44.72629
45%

Average Age of Inventory


Average Collection Period
Average Paying Period
Cash Conversion Cycle

27.30106 25.27371

When doing the proposed effeciency in use of working capital, the required funds needed for worki

1996
5296
4229
1067
690
377
6
111
272

45%
7679.2
6132.05
1547.15
1000.5
546.65
6
221.06
331.59

1997
55%
8208.8
6554.95
1653.85
1069.5
584.35
6
236.14
354.21

65%
8738.4
6977.85
1760.55
1138.5
622.05
6
251.22
376.83

1. COGS & Operating Expense increase prop


2. Finance & Other income remain the same
3. Tax 40%

471
322
1997
60%

2569.05

1997
65%
55
908.4213
1555.693
1094.325
1424.79
680.7898
365.52
311
748.27

, in order to funding its working capital


ng capital by,
tin of working capital, and (3) Delay the
s possible

Proposed

Proposed Working Capital


Reduction of Working Capital
45%
55%
65%
45%
55%
65%
30 558.9414 663.4917 733.975 187.3682 163.8738 174.4463
40 937.8267 1098.178 1215.867 341.2978 319.2311 339.8267
46.28617 920.4885 1162.77 1328.322 15.29403 163.0101 233.9971
543.96 646.115
748.27
23.71383
65%

uired funds needed for working capital can be fulfilled

xpense increase proportionally towards sales


ome remain the same

Operating Assets

1995

1996

Total Assets
Short Term Investments
Total Operating Assets
Required Funds

1594
484
1110

1594
403
1191

Sources of Funds (1996)


Total Liabilites & Equity
Accounts Payable
Total L&E Exclude AP
Increase
Net Profit
Cash Inflow

1997
40%

1997
50%

2148
591
1557
447

2179.8
622.8

2335.5
778.5

2148
466
1682
491
272

2438.9
756.9
320.28

2607.1
925.1
342.9

763

1077.18

1268

1997
60%

2491.2
934.2

2775.3
1093.3
365.52
1458.82

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