By 1990, inventory had grown enormously, absorbing much cash, and Dell attempted to start selling its products through retail channels. Unlike its direct sales paradigm, retail channels introduced many extra costs and reduced margins. Even though Dell's sales were increasing dramatically, profits fell that year by 64%.

Drastic action was required. Dell's financial management decided to take a $91 million charge against earnings to write down its inventory. By 1994, it decided that further cash invested in opening up retail channels would be a waste and it abandoned its retail channel efforts, writing this cash off as well.

today, Dell's return on equity stands at 80%. An average company listed in the Standard & Poor 500 (that is, most large U.S. companies) returns just 15%.

Dell's return on assets is 22%. An average Standard & Poor company returns 2.7% on assets.

Dell's inventory completely turns over 18 times annually. For most S&P 500 companies, the average turnover is just over seven times in a year.

If you had invested $10,000 dollars in Dell at the start of 1995, those shares would have been worth nearly $110,000 by the middle of 1997. This huge increase in the value of the company owes a great deal to Dell's astute financial management, as well as its products and marketing.

According to fortune magazine, Michael dell is now the richest man in Texas. For further information, check Michael Dell Turns the PC World Inside Out

Another fortune article describes Dell as one of the best stock investments of the 1990's in The Process Edge