March 25, 2013

, New York


posted by Francis_McInerney

What is going on at Dell?  In the late 1990s we flagged it as an up and comer and watched as its high Cash Velocity Index clobbered companies like Compaq, which had made the disastrous mistake of acquiring low Cash Velocity Index DEC.  Then somewhere in the middle of the last decade, just as Apple was coming on strong, Dell lost its way.

Here you can see the results.  After 2009, Dell’s cash and capital efficiencies declined markedly suggesting that something was wrong with Dell’s business model.
Dell had smashed the competition with an integrated distribution system:  its production lines ended in …

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