Working Capital at Microsoft and Dell Comparison Essay by Master Researcher

Working Capital at Microsoft and Dell
A look at the strategic outlook of Microsoft and Dell through an examination of their working capital.
# 88671 | 1,125 words | 0 sources | 2006 | US

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This paper discusses the working capital of both Dell and Microsoft. The management discussion and analysis section in particular is examined in terms of its concentration on particular accounting policies, standards, or estimates that the companies feel they must commit extra effort to comply with. Dell spent considerable energy on interpreting and availing itself of a new federal act that encouraged companies to repatriate international earnings. Microsoft spent much energy on declaring its compliance and interpretation of its software classification expenses that allowed it to decrease its taxable revenue.

From the Paper:

"Microsoft's working capital, or its current assets less its current liabilities, gives a strong indication of its strategic outlook because if a company's working capital is positive it retains many more strategic options vis-vis growth. Working capital is also referred to as net current assets or, alternately, current capital. For 2005 Microsoft continued to amass working capital that has been one of its defining characteristics throughout its operational history. In the software 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."

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