Dell Technologies Inc. Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Dell Technologies Inc.

DELL 125.97

-1.0%

3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Meathead who wrote (36701)	4/6/1998 12:38:00 AM
From: Chuzzlewit	Read Replies (2) of 176387

Meathead, part of the differential in margins has to do with what the company manufactures. If you make your own cases, power supplies and wiring you may show higher gross margins, but your inventory levels must be higher, and you create additional levels of complexity and opportunities for added expenses which are frequently not included as COGS. One of the things that Dell critics have a big problem understanding is that as important as margins are, inventory turns are even more important in the tech sector. Suppose you have a 30% margin and turn your inventory 6 times per year. With all other things being equal you can achieve the same gross profit with a 7.5% margin with 24 inventory turns per year. Well Dell turns its inventory more than 52 times a year, and Compaq ... ? Regards, Paul

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next