When we compare Dell’s performance in 1996 as compared to 1995, the Sale grew from $3475 to $5296 reporting a growth of 52.4%. However, the total assets in 1995 were $1594 i.e. 46% of sales and operating assets were total asset less short-term investment i.e. $1110 which is about 32% of sales. Thus when the sales grow by 52%, the operating assets need to grow in a similar proportion. Thus, the operating assets in 1996 must be Operating Asset year 1996= $5296mn * 32% = $1694mn Thus the operating asset must increase by $584mn
to meet the expenses, which will the additional funds that Dell must have procured. If we look at the sources of funds, the liabilities less accounts payable have increased by $500mn and the projected operational profit at 4.3% of projected increase in sale gives additional $230mn. Thus the firm can make sufficient funding through internal sources. The increase in current liability was$939-$752 = $187mn. The increase in current asset was $1957-$1470 = $487mn.