Please be sure to distinguish betwe

Please be sure to distinguish between internal and external sources of funding, and to discuss the trade-off between the uses of external funds in order to maintain high growth rates.
Dell funded its 52% growth in 1996 internally by increasing sales, lowering sales/operating expenses by 1%, which led to an increase in profit margin (net profit/sales) from 4.3% to 5.1%, increasing financing & other income by $42 million, while short term investments increased by 22%, accounts payable increased by 15% (“free” financing from vendors) and Long Term Debt stayed the same. Dell supported this growth externally by issuing an additional $74 million of common stock (the conversion from preferred to common stock is included in this calculation). Using internal sources of funding by becoming more efficient was a preferred route by Dell