Hewlett-Packard Company (HP) is known to be one of the major sellers in the Personal Computer and technology industry. The company gets its name from the last names of the two founders of the company by the names of Bill Hewlett and Dave Packard (HP Garage Timeline, 2015). The company that was foundered by Bill and Dave, started in a garage, has developed into a well diverse business that specializes software development, solutions, and products, and technology. After a successful partnership in the late 1930s, Hewlett and Packard incorporated the company “HP” in the year 1947 (HPQ SEC 10-K, pg. 4). This is also when the corporation changed the location from California to the location that it resides in now in the state of Delaware. Currently …show more content…
This as help the company meet its goals, and allowed for the growth that can be seen through the growth on the financial sheets of the annual report for HP (Sustainability strategy, 2015). Financial Statement Analysis HP’s content that affects the net income include liabilities and contingencies, as well as company assets. HP’s current liabilities were 43,735,000 that included accounts payable, short/current long term debt, and other current liabilities. The total liabilities reached to 76,475,000 in 2014. This was a slight decrease from the previous are of 78,407,000 (2.5% decrease). These factors of the statement show overall trends of strengths or weaknesses of the company. The liabilities, both current and total, have been decreasing over the years. That is a good sign for the company to reduce the large number. The other major factor, contingencies HP discloses, affect how the company is represented as well as gains or losses that are difficult to predict. Some of these contingencies taken from Note 15: Litigation and Contingencies (HP SEC 10-K, pg. 158-160) …show more content…
These ratios that will be utilized is the current ratio, debt to equity, quick ratio, average age of inventory, and turnover ratio. These calculations are listed below. The analysis will show differences in ratios from 2013 to 2014: Financial ratios In millions 2014 2013 Current Current ratio= current assets/current liabilities 1.15 1.11 Debt/equity Total Debt/Equity Ratio = Total Liabilities / Shareholders Equity 0.424 0.43 quick ratio (current assets-inventories)/Current liabilities 0.999 0.97 average age of inventory 365/inventory turnover 26.8 n/a Inventory turnover COGS/(Average of current and 2013 inventory) 13.62 N/A HP SEC 10-K Balance Sheet (2015) Overall, the ratios have shown an improvement from the previous year. The current ratio is at an average number for the industry, and is slowly growing. The inventory turnover also presence an impressive number in the industry. The accumulated other comprehensive income increased by 55.66% from 2013 to 2014. HP records an impairment charge to Interest and other, net in the amount of the credit loss and the balance in this section (HPQ 10-K, pg
Suppliers are mostly concerned with a company 's ability to pay on their liabilities. Therefore, the current ratio and the quick ratio are both looked at by suppliers. The current ratio takes a company’s current assets and divides that by the company’s current liabilities. This number is
The intangibiles has also decreased from 18% to 16% in common-size balance sheet for Applebee’s from 2000 to 2001. This is equivalent to a decrease of 7% from year to year percentage change. This change was driven by amortization of intangible assets related to previous acquisitions of other franchisee restaurants by Applebee’s.
(d) The account receivable growth rate from 2012 to 2013 was a decrease of 5.52% whereas the allowance for doubtful accounts went up by 12.10%. The sales account had a growth rate of 33.81%. From these numbers we see that the sales of Hydrogenics Corporation increased from 2012 to 2013. Since there was a decrease in the accounts receivable,
This section will discuss ratio analysis for the following ratios: current ratio, quick (acid-test) ratio, average collection period, debt to assets ratio, debt to equity ratio, interest coverage ratio, net profit margin, and price to earnings ratio. Depending on the end user which ratio carries more importance, however, all must be familiar with ratio analysis. Details on each company's performance for each of these areas can be found in the attached ratio analysis worksheet.
Analysing the ratio of one with the other in the industry provides for better understanding about the performance of the company in market. An investor has to make a comparative analysis before making any investment decision.
.... In addition, inventory turnover shows a consistent increase from 2.16 in 2011 to 2.38 and 2.49 for 2012 and 2013 respectively.
The first method we will review is the accounting method. Through this accounting approach we will analyze specific ratios and their possible impact on the company's performance. The specific ratios we will review include the return on total assets, return on equity, gross profit margin, earnings per share, price earnings ratio, debt to assets, debt to equity, accounts receivable turnover, total asset turnover, fixed asset turnover, and average collection period. I will explain each ratio in greater detail, and why I have included it in this analysis, when I give the results of each specific ratio calculation.
Organizations use financial statements and ratio analysis assess financial performance viability. The ratio analysis are used to identify trends and to perform organizational comparison (financial) with other companies within same industry. Ratio analysis, using data reported on the financial statements, are divided into five major categories: common size, liquidity, solvency, efficiency, and profitability. This paper will assess the financial stability of John Hopkins Hospital (JHH) using the five ratio analysis.
Overall, Horizontal analysis and financial ratios are essential factors that businesses use to monitor its liquidity. Therefore, in order to improve Apple’s ratios and profitability, the company needs to implement a strategy to increase the company’s liquidity. Business owners or managers should monitor current ratio and acid test ratio as these ratios help us to ensure the company has the proper liquid assets to pay current liabilities, to stay in operations and to expand the company. As we noted in our acid test ratio and current ratio for the company, we show a lower ratio for acid test ratio than the current ratio, which means that the company’s current assets rely on inventory. Therefore, the company needs to convert old inventory into
Any successful business owner or investor is constantly evaluating the performance of the companies they are involved with, comparing historical figures with its industry competitors, and even with successful businesses from other industries. To complete a thorough examination of any company's effectiveness, however, more needs to be looked at than the easily attainable numbers like sales, profits, and total assets. Luckily, there are many well-tested ratios out there that make the task a bit less daunting. Financial ratio analysis helps identify and quantify a company's strengths and weaknesses, evaluate its financial position, and shows potential risks. As with any other form of analysis, financial ratios aren't definitive and their results shouldn't be viewed as the only possibilities. However, when used in conjuncture with various other business evaluation processes, financial ratios are invaluable. By examining Ford Motor Company's financial ratios, along with a few other company factors, this report will give a clear picture of how the company is doing now and should do in the future.
Rondo's Inventory Ratio declined to 9.5 in 2005, down from a ratio of 10 in 2003 and 2004. Rondo's sales improved year-over-year and the decline in inventory turns may be the result of carrying more inventory in response to increased sales. However, Rondo is still carrying too much inventory or the company may have excess obsolete inventory. Rondo needs to utilize just-in-time methods to improve inventory turn over. (Nice catch.) Carrying fewer inventories is required to improve efficiency and reduce cost. Rondo's performance is poor in this area.
...To check how successful it has been, we calculate debtor collection period ratio. (Dyson, 2004) Fixed Asset turnover: In this ratio, we seek the amount of sales that can be generated (or the amount of fixed assets necessary to achieve a level of sales) from a given level of fixed assets. (Klein, 1998) Total asset turnover: This ratio determines that how efficiently a firm is utilizing its assets. If the asset turnover ratio is high, the firm is using its assets effectively in generating sales. If this ratio is low, the firm may not be using its assets efficiently and shall either increase sales or eliminate some of the existing assets. (Argenti, 2002) Solvency Ratio Gearing: Gearing reflects the relationship between a company’s equity capital (ordinary shares and reserves) and its other form of long-term funding (preference share, debenture, etc.) (Black, 2000)
Hewlett-Packard (HP) was founded in 1939 by Bill Hewlett and Dave Packard (Da Monitor, 2008). However, it was not until 1966 when the company first made its entry into the computer manufacturing industry. As provided by Data Monitor (2008), the company became officially incorporated in 1947, went public in 1957 with its shares priced at $16 each, and became listed on the New York S...
HP has to choose a target audience which are the people you are mainly going to sell your products. The target audience for the HP’s PSG industry are the people in the business industry. In order to attract they need to have a customer driven marketing strategy. This strategy is made up of 5 marketing concepts. They are social marketing concept, marketing concept, selling concept, product concept, and production concept. For social marketing concept, companies should consider the society’s long run interests also considering customers wants and needs. HP is committed to reducing its environmental impact of business. HP manages its energy impact by calculating greenhouse gas (GHG) emissions generated by our operations and use of electricity. To achieve organization goals, must focus on knowing the needs and wants of the target market and delivering desired satisfaction better than its competitors; this is called marketing concept. And for selling concept, HP understands the customer needs and wants hence customers will not buy unless there are selling and promotion efforts, hence companies focus on creating sales transactions. HP conducts regular promotions to attract customers and increases sale truncations. For the product concept, consumers prefer products that offer the most in quality, performance and innovative features.
The debt ratios increased by 2.7% to 57% more than double the industry standard of 24.5%. The long term debt increased from $700,000 to $ 1,165,250 an increment of 66.5% in the year 2002. The company is currently highly leveraged thus it needs to work on reducing long term debts and continue to increase assets. The times interest earned ratio dropped by 0.3 to 1.6 in the year 2003. The company could face difficulties making interest payments in case of a sales slump.