Dell Technologies Inc (DELL)

Activity ratios

Short-term

Turnover ratios

	Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020
Inventory turnover	18.65	16.67	13.45	19.55	19.56
Receivables turnover	19.04	5.64	5.58	4.83	4.88
Payables turnover	3.48	4.28	2.92	3.08	3.20
Working capital turnover	—	—	—	—	—

1. Inventory Turnover:
- Dell's inventory turnover has shown an increasing trend over the past five years, indicating that the company is more efficient in managing its inventory levels.
- The current inventory turnover ratio of 18.65 for February 2, 2024, suggests that Dell's inventory is being sold and replenished approximately 18.65 times within the year, which is a positive sign of efficient inventory management.

2. Receivables Turnover:
- Dell's receivables turnover has significantly improved from 4.83 in January 29, 2021, to 19.04 in February 2, 2024, indicating that the company is collecting its accounts receivables more rapidly.
- The higher receivables turnover ratio reflects Dell's effective credit and collection policies, leading to quicker realization of sales revenue from customers.

3. Payables Turnover:
- Dell's payables turnover has fluctuated over the years but has maintained a relatively consistent range between 2.92 and 4.28, with the current ratio at 3.48 for February 2, 2024.
- The payables turnover ratio indicates that Dell is paying its suppliers approximately 3.48 times a year, suggesting a moderate payment frequency and relationship with its vendors.

4. Working Capital Turnover:
- The data for working capital turnover is not provided, making it impossible to analyze the efficiency of Dell's working capital management based on the available information.
- Working capital turnover ratio helps in assessing how effectively a company is using its working capital to generate sales, but it is not applicable in this analysis due to the missing data.

Overall, Dell Technologies Inc has demonstrated improvement in its inventory turnover and receivables turnover ratios, indicating enhanced efficiency in managing inventory and collecting accounts receivable. The payables turnover ratio has remained relatively stable, reflecting consistent payment practices. However, the analysis of working capital turnover is limited due to incomplete data.

Average number of days

		Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020
Days of inventory on hand (DOH)	days	19.57	21.90	27.15	18.67	18.66
Days of sales outstanding (DSO)	days	19.17	64.73	65.40	75.56	74.79
Number of days of payables	days	104.76	85.26	124.92	118.35	114.12

Dell Technologies Inc's activity ratios indicate the efficiency of its inventory management, accounts receivable collection, and accounts payable turnover over the past five years.

1. Days of Inventory on Hand (DOH):
- The company has shown a decreasing trend in the days of inventory on hand, indicating an improvement in managing its inventory levels more efficiently, translating to quicker turnover and potentially lower carrying costs.
- In the most recent year, Dell had an average of 19.57 days of inventory on hand, which is lower compared to the previous years, showing a positive trend in inventory management.

2. Days of Sales Outstanding (DSO):
- Dell's days of sales outstanding have fluctuated over the years, with significant variations from one year to another. The decreasing trend from 2021 to 2024 indicates an improvement in collecting payments from customers more promptly.
- In 2024, the company had an average of 19.17 days of sales outstanding, a significant improvement from past years, which suggests a more efficient accounts receivable collection process.

3. Number of Days of Payables:
- Dell's number of days of payables has been somewhat volatile over the years, but it has generally been increasing. This indicates that the company is taking longer to pay its suppliers, which could be beneficial for cash flow management.
- In 2024, Dell had an average of 104.76 days of payables, which was higher compared to the previous years, suggesting that the company is taking advantage of longer payment terms with its suppliers.

Overall, Dell Technologies Inc's activity ratios reflect positive trends in inventory management and accounts receivable collection efficiency, as well as strategic management of accounts payable. Effective management of these activity ratios can contribute to improved liquidity and working capital management for the company.

Long-term

	Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020
Fixed asset turnover	13.75	16.48	18.69	17.93	14.01
Total asset turnover	1.08	1.14	1.09	0.70	0.71

The fixed asset turnover ratio measures how efficiently a company generates revenue from its fixed assets. Dell Technologies Inc's fixed asset turnover has decreased over the past five years, indicating that the company is generating less revenue from its investments in fixed assets. The ratio declining from 16.48 in Feb 3, 2023, to 13.75 in Feb 2, 2024, suggests a decrease in the efficiency of utilizing fixed assets to generate sales.

On the other hand, the total asset turnover ratio reflects how well a company utilizes all its assets to generate sales. Dell Technologies Inc's total asset turnover has fluctuated over the past five years, with a notable increase in 2022 compared to previous years. The ratio peaked at 1.14 in Feb 3, 2023, before declining slightly to 1.08 in Feb 2, 2024, indicating that the company is effectively using its total assets to generate revenue, though there has been a recent decrease.

Overall, Dell Technologies Inc's long-term activity ratios suggest that while there has been a decline in the efficiency of generating revenue from fixed assets, the company has been relatively successful in utilizing its total assets to drive sales, albeit with some fluctuations in recent years.