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Financial Analysis Project - Hewlett Packard

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Price: $10.00

Assume you have $10,000 of savings and would like to invest in a company’s stock. You are very interested in Hewlett-Packard Company but you are not sure if it is a good investment target. You need to find the company’s annual financial statement for the three most recent years and conduct a preliminary financial analysis to determine whether the company is doing well in a growing trend. Write up your analysis in a Word document (no more than 10 pages).

Your report should include the following sections:
1. Introduction (10 points): Briefly describe the company’s main business. List the names and years of the financial statements you studied to conduct your analysis.
2. Initial Review (15 points): Describe the key messages in the auditor’s report for the most recent year. Brief the highlights in the management’s discussion and analysis (MDA) in the most recent year. Describe any unusual events or characteristics you found.
3. Liquidity Analysis (30 points): Compute the company’s liquidity ratios (including current ratio, quick ratio, average sales per day, collection period, cost of goods sold per day) for the three most recent years and list them in a table. Briefly discuss the trend in the company’s liquidity - Is it getting better, worse, or not much change?
4. Profitability Analysis (30 points) : Compute the company’s profitability ratios (including gross profit percentage, operating income percentage, return on equity, return on assets, cash return on assets, quality of income, earnings per share) for the three most recent years and list them in a table. Briefly discuss the trend in the company’s profitability – Is it getting better, worse, or not much change?
5. Solvency (capital structure) Analysis (15 points): Compute the company’s solvency ratios (including financial leverage, debt-to-equity ratio) and list them in a table. Briefly discuss the trend in the company’s solvency – Is it getting better, worse, or not much change?
6. Conclusion (10 points): Present your overall thought about the company based on the above analysis. Did the company do well in its main business? Do you think it will get better and worse? Do you think it will make a good candidate of your investment portfolio?
7. Profitability comparison with the key competitor (10 bonus points): Identify a key competitor for the company. Compare the company’s profitability ratios in the most recent year to its competitor’s. List the numbers in a table and briefly describe what you observe.

Refer to Chapter 11 for details of different types of analysis. You can usually find the company’s annual reports on the company’s Web site, under the “About the company” section, and “Investor relations” subsection. Another possible starting point is http://finance.yahoo.com. Look for 10K statement when you search the company’s SEC filings.

Solution

The solution provides a detailed discussion of the financials of Hewlett Packard, along with a discussion of the initial review of the company. The paper discusses in detail the liquidity analysis, profitability analysis and solvency analysis. The paper also discusses a detailed discussion of the profitability comparison with Dell. The comparison is based on several aspects including Gross Profit percentage,Operating Income percentage, Return on Equity, Return on Assets, Cash Return on Assets, and Quality of Income. The solution includes a word document with the overall report. An excel sheet with the calculations have also been included.

No. of Words: 1,259 Help

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Price: $10.00

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Financial Analysis Project - Hewlett Packard

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