Smith and Jones, P.A.

Memorandum

Dell Inc., formerly PC’s Limited(1984-1988) and Dell Computer Corporation(1988-2003),

international company that designs, develops, and manufactures personal computers and various

of computer relating products. The company is one in all the world’s leading suppliers of PCs.

Dell is headquartered in Round Rock, Texas. (Augustyn)

The company was founded by Michael Saul Dell who was then a student at the University of

Texas in Austin.

The information of the Dell is listed below;

● Revenue

Dell’s total net revenue for 2019 was $90,621 million which is increase from 2018 sales that

were $79,040 million. Their sales are made up mostly from

● Net Income

Dell experience loss in 2019 & 2018. The loss in 2019 reduces from the previous year by

25.46%.

● Cash Flow from Operating Profit

Cash flow that Dell can obtain from their operating activities is $6,843 million in 2018 and raise

to $6,991 million in 2019.

● Total Asset
The total asset of this company for 2019($111,820 million) lower than 2018($124,193 million).

This happen as in 2019 the current asset is lesser because no short term investment in this

particular year.

● Number of Employees

As of February 1, 2019, Dell had almost 157,000 amounts of full-time employees; approximately

24,000 are employees of VMware, Inc. In comparison, as of February 2, 2018, the company had

approximately 145,000 total full-time employees which are 22,000 of whom were employees of

VMware, Inc. As of February 1, 2019, about 37% of full-time employees were located in the

United States and 63% were located in other countries.

Dell released its first notebook computer named 316LT, in 1989. The coming years were marked

by advancements in Dell’s mobile technology. In 1991 Dell’s first color notebook computer went

on sale. Dell was the first company to supply long-lasting lithium-ion batteries in 1994. In the

early 21st century Dell enlarged its product line include merchandise such as televisions, digital

cameras, and a several of computer-related products. The service and products also are laptops,

MP3 players, printers, servers, data storage, devices, software, and electronics that make by other

manufacturers.

External business forces influence business risk:

● Competitors
Dell Inc. competes most closely with Hewlett-Packard Company and Lenovo. Dell also

conjointly competes with IBM Corporation within the business hardware and software, as well as

with Apple Inc. and many other makers of consumer PCs. IBM, Hewlett-Packard (HP) and

Lenovo, Dell provides business products that include computer servers, data storage devices,

PCs, and enterprise software which almost same with Dell’s products. And like these business

rivals, Dell sells monitors, printers, networking hardware, and cloud-based information

technology services. After essentially IBM left the consumer computing sector in 2004, Dell has

less of competitors to fight with. Dell's consumer PCs contend mostly with product from brand

Apple, HP, Lenovo, Acer and Asus. (Who are Dell's Main Competitors, 2018)

● Customers

Dell has a fantastic long-market term growth strategy and focuses with a single-minded purpose

on customers Dell segments its offerings based on psychographics & demographics factors. It

targets tech savvy people, professionals & executives. Moreover it makes customer

engagement strong in order to stand ahead of other companies.

● Suppliers

Dell manages social and environmental responsibility holistically across the supply chain,

instead of by product. Most suppliers provide inputs to multiple products and sometimes multiple
suppliers are qualified for a single component. Some of major suppliers are Compal, Foxconn,

Acbel, AU Optonics, BOE Global, Celestica, Fuji Xerox, Intel, LG, Panasonic, Samsung,

Seagate, Sharp, and Toshiba. (About Dell, 2017)

A strong connects with customers as well as serviceability is the winning factors in the hardware

& software industry and that is what dell is working on. Dell’s strategy is global. It realizes that

being geographically closer to the customer is essential in carrying out its marketing strategies as

well as in enabling it to build customer base. Free shipping and student purchase program are of

alternative to distribute their products and services. Dell works on build to order business model

and uses Just in time strategy to distribute its products at optimal prices thereby decreasing the

inventory cost and delivery time. Dell also has its own dedicated retail stores. But the major sale

is driven through modern retailers as well as Ecommerce. (Bhasin, 2018)

Dell positions itself based on User and benefit based positioning strategies in order

to differentiate itself from the other players in the market. Dell is one company where the direct

orders to its home site are also fantastic. This is because Dell offers you to build up your laptop

with the specifications that you want, thereby giving you a customised laptop. It was one of the

first laptop companies to offer mass customization in its laptops. In order to support its hardware

business it has Dell solution centre to provide support services 24/7 to its customers.

The critical business process for Dell is will be supply chain process, the research and

development, development process and innovation. This will impact company performance

overall. Cost of marketing, cost of investment in research and development and the sales revenue

will be associated during the process. Therefore, Dell initiative is to measure accounting

information in details without making any misstatements. To reduce the risk during critical
business process, Dell uses GAAP to report the information regarding accounting of the

company. Dell recognizes revenue at date of ship, value the inventories using FIFO method,

records research and development when incurred and allowance method is apply to write down

the accounts receivable. The risk of material misstatement is financial reporting risk and audit

risk.

The auditor must have ability to knowledge the entity and its environment to assess the

risk of the material misstatement. Also, understanding to design the nature, timing, and extent of

further audit procedures to be perform during auditor their client.

Risks of material misstatement are not cause from business risk only. The auditor needs

to take into account those business risks that will be effect to be a material misstatement either at

the financial statement level or assertion level to classes of transactions, account balances and

disclosures.
Example of business risks that could give rise to material misstatements are (Identifying and

assessing the risks of material misstatement):

● Operation in regions that are economically unstable, for example, countries with

significant currency devaluation or highly inflationary economies

● The regulation complexly higher to measure.

● Marginally achieving explicitly stated strategic objectives

● Constraints on the availability of capital and credit

● Industry changes

● Supply chain changes

● Expanding into recent locations

● Developing of offering new products or services, or moving into new lines of business

REFERENCES

About Dell. (2017, Oct). Retrieved from Dell.com:

https://www.dell.com/learn/us/en/uscorp1/corp-comm/supply-supplier-list

Augustyn, A. (n.d.). Dell Inc. Retrieved from Britannica.com:

https://www.britannica.com/topic/Dell-Inc
Bhasin, H. (2018, September 3). Dell marketing strategy. Retrieved from MARKETING91:

https://www.marketing91.com/marketing-strategy-dell/

Identifying and assessing the risks of material misstatement. (n.d.). Retrieved from studylib:

https://studylib.net/doc/5830280/identifying-and-assessing-the-risks-of-material-

misstatement

Who are Dell's Main Competitors. (2018, Nov 4). Retrieved from Investopedia:

https://www.investopedia.com/ask/answers/052015/who-are-dells-main-competitors.asp