solution
solution.
CASE
Refer to the annual report of Dell in Appendix A:
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a. Explain how the following items create differences between Dell’s earnings from continuing operations and its net cash provided by operating activities:
(1) Depreciation and amortization Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â (3) Decrease in receivables
(2) Change in deferred taxes Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â (4) Decrease in inventories
b. Explain why net income is much less than cash from operations in 2005.
c. Calculate Dell’s free cash flows for each of the past three years.
d. How has Dell used its free cash flows during the past three years?
e. How much cash has Dell returned to shareholders during each of the past three years and in total?