Financial Management Principles (Dell inc.) Essay

Financial Management Principles (Dell inc.) - Essay Example Why had Dell made it to the top spot According to writer Abrhm Lustgarten "Dell's peers see it as brilliantly managed brand - but no innovator in raw computing" (Dell Tops Fortune's List, 2005). Though Dell slightly fell down to the 8th position in the 2006 Fortune magazine's America's Most Admired Companies List (Fortune America's Most Admired Companies 2006), still it leads the computer manufacturers in this prestigious list. Thanks to the exemplary entrepreneurial and leadership trait of Michael Dell, Dell, Inc. has maintained its position as the industry leader in computer manufacturing. In terms of its financial status, as illustrated on Table 1 below, Dell is in good shape. In terms of profitability, the industry leader performs extremely well. Having a return on equity (ROE) of 86.5%, Dell enables its investors to yield $.856 in every dollar they invested on its stocks within a year. Together with 15.5% return on asset (ROA) and gross margin that accounts for 18.2% of the entire revenue, the figures under the Profitability Ratios section of the Financial Ratios of the company (Table 1), exhibits the company's efficient cost management.