DELL INC.

Liquidity Ratios:

Current Ratio=    CA=Current Assets/Current Liabilities

• Ability to pay bills over short run
•  High and/or increasing ratios indicate: ability to pay current liabilities by liquidating current assets

Dell (2006)=  17,706/10,657=1.66

Dell (2005)=  16,897/14,136=1.20

Dell (2004)=  10,633/10,896=0.98

Quick Ratio=    (CA=Current Assets - I=Inventory)/Current Liabilities

• High and/or increasing indicates: ability to pay current liabilities by liquidating current assets other than inventory

Dell (2006)=  (17,706-576)/10,657=1.60

Dell (2005)=  (16,897-459)/14,136=1.16

Dell (2004)=  (10,633-327)/10,896=0.95