Annual Report for Dell Computer

Dell Incorporated

Week 6 Course Project

David S. Pesi

DeVry University

Dell Incorporated

Dell is a company that provides global information technology and offers its customers a range of solutions and services brought directly by Dell and through other distribution channels. They focus on providing technology solutions that are more accessible, more efficient and easier to manage. They built their reputation as a leading technology provider by taking suggestions from their customers and developing solutions that meet customer needs. A few years ago, they proposed a broad conversion of the company to become an end-to-end technology solutions company.

In 2011, Dell’s Property, Plant, and Equipment (PP&E) was $2,181 million; in 2012, it decreased to $1,953 million and then bounced back to $2,124 million in 2013. With having PP&E, Dell has to account for the PP&E’s amortization and depreciation expenses. Dell keeps very close detail of these expenses on the books as well. The amortization expense is similar to the depreciation expense for Dell. Amortization is mainly used when the asset in question is a large one that may affect the financial statements for the period during which, without amortization procedures, it would have to be recorded. This may also be the case when a firm begins a new investment, such as a computer company investing in a new production facility, that will provide long-term benefits, but whose costs have to be paid mostly up-front. Were the firm to record the financial transaction as occurring all in one period, that period would probably be associated with poor financial statements and low profits, and most likely, investor shock. Since it is rarely desirable to shock investors, large costs are amortized or spread out over multiple financial periods. So far for the year 2013, the amortization and depreciation expense for Dell is $968 million. In 2012, Dell made $18 million in proceeds from the sale of facilities and land;...