PLANNING ANALYSIS FOR DELL COMPUTERS
Should Dell decide to implement our recommendations to take out short and long-term loans (refer to the chart above), they will need to weigh the positive and negative ramifications of this proposal. These loans could ultimately increase sales and profitability if Dell decides to reinvent their marketing techniques that are necessary to increase profits. It would raise ratios equal to the industry standards and concurrently catch the investor's eye. In addition, Dell could establish themselves as lenders rather than borrowers. On the flip side, Dell would have to pay back the loan within a specific time frame with predetermined interest rates. They may run the risk of hidden costs such as unwise investments and penalties for not meeting the deadlines set up by the bank. In general, we believe that by increasing Dell's net capital, it would better place the company in good standing with potential investors. We are optimistic that this recommendation will enhance Dell's overall sales, generate higher profitability margins, enhance customer service and maintain quality of goods sold. We also believe that it involves little risks where they can maximize their profits with very little downside.
