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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (71078)	11/28/1999 7:19:00 PM
From: Chuzzlewit	Respond to of 132070

I found it odd that their cash exceeds their book value, about $ 1.85ish to 1.35ish. Is that caused by acquisitions, or is the number in error? No, the number is correct. Dell is not an acquisitive company -- only 1 acquisition in its history (and a very small one at that). The reason is that Dell has phenomenal cash flow and relatively high payables. Essentially, they receive almost 60 days from their suppliers, maintain very low inventories and receive relatively rapid payment from customers. It is this combination of factors that makes Dell unique. I thought about this long and hard before investing in Dell. My initial reservation was that anybody could copy this model, and after all, PCs are a commodity. In the intervening years every competitor has tried to emulate Dell, and so far they have failed. Your observation is also consistent with their high ROICs. Very little cash needs to be tied up in plant, equipment and inventory. So they end up using cash provided by suppliers. TTFN, CTC