EMC and Network Appliance-Working Capital

Paper Summary:

This document discusses financial analysis techniques for managers. The two companies that this paper reviews are EMC Corporation and Network Appliance. This paper examines the working capital of each company, as are each company's internal functions and intermediaries used to control the auditing and oversight process. Finally, this paper discusses the importance of financial controls and the impact of Sarbanes-Oxley relative to each company.

From the Paper:

" EMC and Network Appliance: Working Capital EMC Working capital can be defined as current assets minus current liabilities and indicates whether a company maintains sufficient capital to fund growth and expansion or otherwise act on its strategies. In 2005 EMC was able to amass working capital in a way that the market had not allowed it to in years past. In the data storage industry, many companies, because of the increasing returns of the life of their products, the ability to amass working capital is characteristic of the industry. EMC, for 2005 exhibited the following working capital ratios: Current Ratio Current Ratio (in millions) 2004 Current assets 15422m / Current liabilities 2948 = Current ratio 5.2 (EMC, 2005) EMC lists its assets in the following manner: cash and cash equivalents, short-term investments, accounts receivable, inventories, deferred income taxes, and various amounts listed under other. "

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