Question:
Refer to the income statements of Dell Inc. included in the company’s financial statements in Appendix B
at the back of the text.
Required:
1. What was the percentage increase or decrease in the company’s net income from 2010 to 2011? From
2009 to
2010?
2. Using 2011 data, what is the company’s approximate income tax rate?
3. Using 2011 data, what is the percentage of net income relative to revenue dollars?
Answer:
Requirement 1
2010 to 2011: ($2,635 – 1,433) ÷ $1,433 = 83.9% increase
2009 to 2010: ($1,433 – 2,478) ÷ $2,478 = 42.2% decrease
Requirement 2
Provision for income taxes ÷ Income before taxes
$715 ÷ $3,350 = 21% = Approximate income tax rate
Requirement 3
$2,635 ÷ $61,494 = 4.3%
Refer to the income statements of Dell Inc. included in the company’s financial statements in Appendix B
at the back of the text.
Required:
1. What was the percentage increase or decrease in the company’s net income from 2010 to 2011? From
2009 to
2010?
2. Using 2011 data, what is the company’s approximate income tax rate?
3. Using 2011 data, what is the percentage of net income relative to revenue dollars?
Answer:
Requirement 1
2010 to 2011: ($2,635 – 1,433) ÷ $1,433 = 83.9% increase
2009 to 2010: ($1,433 – 2,478) ÷ $2,478 = 42.2% decrease
Requirement 2
Provision for income taxes ÷ Income before taxes
$715 ÷ $3,350 = 21% = Approximate income tax rate
Requirement 3
$2,635 ÷ $61,494 = 4.3%
