this my financial statement analysis compression of both company

1. Financial statement analysis
Project of financial statement of analysis of HP
Submitted to : Mr Ahmad Salman
Submitted by : Iqra Ashraf

2. Economy:America
Competitor:Dell

3. History of HP
HP stands for Hewlett-Packard. It is an American multinational IT
company that provides hardware and software related products
and services. It is headquartered in Palo Alto, California, USA. ...
In 2014, HP planned to separate into two new companies; HP Inc.
and Hewlett Packard Enterprise (HPE)

4. Hewlett-Packard, one of the world's largest computer and
electronics companies. Founded in January 1, 1939 by William
Hewlett and David Packard, HP is best known today for its line of
LaserJet and Desk Jet printers. Focused on creating technology
that makes life better for everyone, everywhere
HP Inc. has expanded in the past 18 months from 350 stores to
500 stores, and is now targeting to open 1,000 exclusive HP
World stores in India.
Objective of HP
The HP Company has clearly stated their corporate
objectives, which are
 customer loyalty
 profit
 marketing leadership
 , commitment to employees
 We earn customer respect and loyalty by consistently
providing the highest quality and value
 We achieve sufficient profit to finance growth, create
value for our shareholders and achieve our
corporate objectives.

5. Vision And Mission statement of HP

6. Company Background
Name: HP
Logo:

7. Industries served: Computer and hardware and software
Headquarters: US
Employees: sixty thousand employees
Net revenue:$58.5 billion
Geographic areas served: Worldwide
Main Competitors: ., Apple Inc., Cisco Systems, Inc., Dell Inc., Fujitsu Limited,
International Business Machines Corporation, Lenovo Group Limited, Microsoft
Corporation, Oracle Corporation, Samsung Electronics Co., Sony Corporation and
many other companies.
HP SWOT analysis
STRENGTHS:
Strong presence in china
Brand reputation
Diversified product portfolio
WEAKNESS:
1 .Poor presence in tablet market
2. 29% of income comes from personal division
3 .Poor competency in acquisitions
OPPORTUNITIES:
1 .Expandservicesand enterprisesolutionsdivisions
2. Increasingdemandof product

8. 3. Productlaunches
THEART:
 Rapid technological change
 Competitive Environment


 Slowing growth rate of the Pc market

9. We are the employees of HP

10. Ratio Analysis
Introduction
Ratio Analysis - Introduction. Ratio analysis is an accounting
tool, which can be used to measure the solvency, the profitability,
and the overall financial strength of a business, by analysing its
financial accounts (specifically the balance sheet and the
profit and loss account).
Meaning and definition
The term ‘ratio’ refers to the mathematical relationship between
any two inter-related variables. In other words, it establishes
relationships between two item expressed in quantitative form

11. Balance Sheet Of HP:
2018 2017
Assets
Current assets:
cash and cash equivalents $ 5,166 $ 6,997
Accounts recvivable,net 5,113 4,414
Inventory 6,062 5,786
Other current assets 5,046 5,121
Total current assets 21,387 22,318
Property ,plant and equipment, net 2,198 1,878
Good will 5,968 5,622
Other non-current assets 5,069 3,095
Total assets $ 34,622 $ 32,913
LIABILITIES AND STOCKHOLDER's DEFICIT
Current liabilities
Notes payable and short-term
borrowings
$ 1,463 $ 1,072
Accounts payable 14,816 13,279
Employee compensation and benefits 1,136 894
Taxes on earnings 340 214
Other accrued liabilities 7,376 6,953
Total current liabilities 25,131 22,412
Long-term debt 4,524 6,747
Other non-current liabilities 5,606 7,162
Commitments and contingencies

12. Stockholders’ deficit
Preferred stock, $0.01 par value (300 shares
authorized; none issued
Common stock, $0.01 par value (9,600 shares
authorized; 1,560 and 1,650 share s issued and
outstanding at
October 31, 2018, and 2017
respectively)
16 16
Additional paid-in capita 663 380
Accumulated deficit -473 -2,386
Accumulated other comprehensive loss -845 -1,418
Total stockholders’ deficit -639 -3,408
Total liabilities and stockholders’ deficit $ 34,622 $ 32,913
ConsolidatedStatements of Comprehensive Income
2017 2016
Net revenue 58,472 52,056
Costs and expenses:
Cost of revenue 47,803 42,478
Research and development 1,404 1,190
Selling, general and administrative 4,859 4,376
Restructuring and other charges 132 362
Acquisition-related charges 123 125
Amortization of intangible assets 80 1
Defined benefit plan settlement
charges
7 5
Total costs and expenses 54,408 48,537
Earnings from continuing operations 4,064 3,519

13. Interest and other, net -1,051 -243
Earnings from continuing operations
before taxes
3,013 3,276
Benefit from (provision for) taxes 2,314 -750
Net earnings from continuing
operations/EAT
5,327 2,526
Net loss from discontinued operations
Net earnings 5,327 2,526
Net earnings per share:
Basic
Continuing operations 3.3 1.5
Discontinued operations
Total basic net earnings per share 3.3 1.5
Diluted
Continuing operations 3.26 1.48
Discontinued operations
Total diluted net earnings per share 3.26 1.48
Weighted-average shares used to
compute net earnings per share
Basic 1,615 1,688
Diluted 1,634 1,702
In 2018 Solves Ratios
1. CurrentRatio:
Current assets/current liabilities
= 21,387/ 25,131
=1:0.0851020:1

14. Explanation.
The currentratio is a liquidity and efficiency ratio that measures a firm's
ability to pay off its short-term liabilities with its currentassets.inthis situation
company current ratio around 0.8:1 that shows that company not able to
pay their current liabilities..
2. Quick ratio/acidtest ratio:
=Cash + account receivable/current liabilities
= $ 5,166+5,113/25,131
=1: 0.409016
Explanation:
Quick Ratio is an indicator of company's short-term liquidity, the quick
ratio, also known as the acid-test ratio is a type of liquidity ratio which measures the
ability of a company to use its near cash or quick assets to pay its current liabilities
immediately.
3. Cash ratio/ absolute quick ratio:
=Cash /current liabilities
= 5,166 /25,131
=1: 0.205562850
Explanation.
- The cash ratio tells us how much we have cash to pay our short term liabilities
This statement shows that cash is insufficient to pay short term
liabilities.

15. 4: Return on total assets:
= EBIT/ total assets*100
= (-1,051+3,013)/ $ 34,622 *100
=1:5.666917
Explanation: Return on total assets (ROTA) is a ratio that measures a
company's earnings before interest and taxes (EBIT) relative to its total net
assets.
5: Return on Equity:
=EAT/equity*100
= 5,327/-639*100
=1:833.6463224
Explanation:
The return on equity ratio or ROE is a profitability ratio that measures the
ability of a firm to generate profits from its shareholders investments in the
company.
6: Inventory Turnover Ratio:
= Cost of goods sold/ average inventory/2
= 47,803/ (6,062+ 5,786/2)
=1: 8.0693787
Explanation

16. Inventory Turnover Ratio Measures Company’s efficiency in
turning its inventory into finish goods.in other words this measures
how many times average inventory is “turned” or sold during a
period.
7: Inventory turnover in times:
= 365/inventory turnover ratio
=365/ 8.069379
45.23273
Explanation:
It indicates how many days the firm averagely needsto turn
its inventoryinto finish goods.
8: Account Receivable Turnover Ratio:
=credit sales/ (average account receivable/2)
= 58,472/ (5,113+4,414/2)
12.27500787236276
Explanation:
It indicates how many days the firm averagely needs to turn
its inventory into finish goods.

17. 9: Account Receivable Turnover Ratio in times:
=365/account receivable turnover ratio
=365/12.27501
29.73520999168229
Explanation:
The accounts receivable turnover ratio measures how many days
a business can collect its average accounts receivable during the
year
10: Account payable Turnover Ratio:
=cgs/ (average account payable/2)
=47,803/ (14,816+13,279/2)
3.402954262324257
Explanation:
The accounts payable turnover ratio shows how efficient a company is at paying its
suppliers and short-term debts.
11: Account payable Turnover Ratio in times:
=365/ account receivable turnover ratio
=365/3.402954
107.2597513807122

18. Explanation:
The accounts payable turnover in days shows the average number of days that
a payable remains unpaid. To calculate the accounts payable turnover in days,
simply divide 365 days by the payable turnover ratio.
Vertical Analysis:
Balance sheet assets.
At January 31, 2017 and 2016
Total assets %
Vertical Analysis 2018 2017
Currentassets:
Cash andcash equivalents 1140% 801%
Short-terminvestments 179% 167%
Accountsreceivable,net 914% 797%
Short-termfinancingreceivables,net 320% 273%
Inventories,net 219% 215%
Othercurrentassets 413% 351%
Total currentassets 3186% 2603%
Property,plant,andequipment,net 441% 478%
Long-terminvestments 340% 322%
Long-termfinancingreceivables,net 305% 224%
Goodwill 3265% 3292%
Intangible assets,net 2311% 2965%
Othernon-currentassets 152% 115%
Othernon-currentassets 10000% 10000%
Total assets 0% 0%
LIABILITIES, REDEEMABLE SHARES, AND STOCKHOLDERS’
EQUITY 0% 0%
Currentliabilities: 644% 535%
Short-termdebt 1499% 1220%

19. Accountspayable 627% 602%
Accruedand other 983% 868%
Short-termdeferredrevenue 3753% 3226%
Total currentliabilities 3598% 3643%
Long-termdebt(Note 8) 836% 713%
Long-termdeferredrevenue 556% 790%
Othernon-currentliabilities 8743% 8372%
Total liabilities 0% 0%
Commitmentsandcontingencies (Note13) 31% 20%
Redeemable shares(Note20) 0% 0%
Stockholders'equity: 1626% 1709%
Commonstockand capital inexcessof $.01 par value (Note 18) -118% -64%
Treasurystock at cost -757% -475%
Accumulateddeficit 11% -50%
Accumulatedothercomprehensive income (loss) 763% 1120%
Total Dell TechnologiesInc.stockholders’equity 463% 488%
Non-controllinginterests 1226% 1608%
Total stockholders'equity 10000% 10000%
Total liabilities,redeemable shares,andstockholders'equity 0% 0%
CONSOLIDATED STATEMENTS OF INCOME (LOSS) 0% 0%
Netrevenue: 0% 0%
Products 0% 0%
Services 4809% 4120%
Total netrevenue 1624% 1094%
Cost of netrevenue: 6433% 5215%
Products 0% 0%
Services 4107% 3567%
Total costof netrevenue 686% 551%
Gross margin 4793% 4118%
Operatingexpenses: 1640% 1096%
Selling,general,andadministrative 0% 0%
Researchanddevelopment 1554% 1148%
Total operatingexpenses 359% 223%
Operatingloss 1913% 1371%
Interestandother,net -273% -275%
Loss fromcontinuing operationsbeforeincome taxes -193% -178%
Income tax benefit -465% -453%
Netlossfromcontinuingoperations -150% -137%
Income fromdiscontinuedoperations,netof income taxes -315% -316%
Netloss 0% 0%
Less:Netlossattributable to non-controllinginterests -315% -145%
Netlossattributable toDell TechnologiesInc. -10% -4%
Earnings(loss) pershare attributable toDell TechnologiesInc. - basic: -305% -141%

20. Continuingoperations - ClassV CommonStock – basic 0% 0%
Continuingoperations - DHIGroup – basic 0% 0%
Discontinuedoperations - DHIGroup – basic -1% -1%
Earnings(loss) pershare attributable toDell TechnologiesInc. - diluted: 0% 0%
Continuingoperations - ClassV CommonStock – diluted 0% 0%
Continuingoperations - DHIGroup – diluted 0% 0%
Discontinuedoperations - DHIGroup – diluted -1% -1%
Horizontal Analysis 2018 2017
Currentassets: -47.1606502
Cash andcash equivalents -10.73417722
Short-terminvestments -18.65180467
Accountsreceivable,net -21.63252638
Short-termfinancingreceivables,net -5.516154452
Inventories,net -21.95945946
Othercurrentassets -26.59474214
Total currentassets 4.652396957
Property,plant,andequipment,net -9.49500263
Long-terminvestments -40.47529234
Currentassets: -2.595733745
Cash andcash equivalents 19.36496163
Short-terminvestments -36.51026393
Accountsreceivable,net -3.447371538
Short-termfinancingreceivables,net #DIV/0!
Currentassets: #DIV/0!
Cash andcash equivalents -24.39563912
Currentliabilities: -27.12522535
Short-termdebt -7.613428852
Accountspayable -17.13589868
Accruedand other -20.34089419
Short-termdeferredrevenue -2.175982908
Total currentliabilities -21.25489266
Long-termdebt(Note 8) 27.21918835
Long-termdeferredrevenue -8.026999171
Othernon-currentliabilities #DIV/0!
Total liabilities -66.23376623
Commitmentsandcontingencies(Note13) #DIV/0!
Redeemable shares(Note20) 1.534729442
Stockholders'equity: -91.4893617
Commonstockand capital inexcessof $.01 par value (Note 18) -64.96701729
Treasurystock at cost 121.8487395

21. Accumulateddeficit 29.57789021
Accumulatedothercomprehensive income (loss) 1.821019771
Total Dell TechnologiesInc.stockholders’equity 21.15839865
Non-controllinginterests -3.447371538
Total stockholders'equity #DIV/0!
Total liabilities,redeemable shares,andstockholders'equity #DIV/0!
CONSOLIDATED STATEMENTS OF INCOME (LOSS) #DIV/0!
Netrevenue: #DIV/0!
Products -20.72639921
Services -53.51731602
Total netrevenue -27.60779988
Cost of netrevenue: #DIV/0!
Products -19.08036709
Services -28.8148603
Total costof netrevenue -20.3828852
Gross margin -54.74959488
Operatingexpenses: #DIV/0!
Selling,general,andadministrative -39.98526703
Researchanddevelopment -66.31259484
Total operatingexpenses -44.26623897
Operatingloss -2.490774908
Interestandother,net -11.92965779
Loss fromcontinuing operationsbeforeincome taxes -6.198655713
Income tax benefit -13.21803582
Netlossfromcontinuingoperations -3.157613059
Income fromdiscontinuedoperations,netof income taxes #DIV/0!
Netloss -124.3888242
Less:Netlossattributable to non-controllinginterests -176.0869565
Netlossattributable toDell TechnologiesInc. -122.9665072
Earnings(loss) pershare attributable toDell TechnologiesInc. - basic: #DIV/0!
Continuingoperations - ClassV CommonStock – basic 2.083333333
Continuingoperations - DHIGroup – basic 16.90140845
Discontinuedoperations - DHIGroup – basic 100
Earnings(loss) pershare attributable toDell TechnologiesInc. - diluted: #DIV/0!
Continuingoperations - ClassV CommonStock – diluted 2.797202797
Continuingoperations - DHIGroup – diluted 16.90140845
Discontinuedoperations - DHIGroup – diluted 100

22. History of Dell:
Dell is an American multinational computer technology company.
The company, first named PC’s Limited, was founded in 1984
by American Michael Dell, who was then a student at
the University of Texas in Austin.
Vision and mission statement
• VISION:
• The company’s vision statement is all about the way they
do business and the way they interact with the community.
• MISSION
• The Dell mission statement is to be the most successful
computer in the world.
Objective of DELL

23. By improving the quality, speed, dependability, flexibility and
cost operations performance, Dell is a global growth and high
percentage of customer satisfaction.
SWOT ANALYSIS
Strength:
 A large portfolio
 Strong customer foundation
 Direct selling business
WEAKNESSES:
 They have weak business relationships with many computer
retailers
 They do not have unique technologies to offer the market.
 Dealing with a large amount of suppliers from many different
countries can cause a large issue when product are recalled.
THEART
 New entrance in the market.
 Rapid technological changes.
 Price difference among brands is getting smaller
 Threat of competition
OPPORTUNITIES:
1 .Expandservicesand enterprisesolutionsdivisions
2. Increasingdemandof product
3. Productlaunches

24. Balance sheet:
1. CurrentRatio:
Current assets/current liabilities
= 38,957/45,892
0.8488843371393707
Explanation.
The currentratio is a liquidity and efficiency ratio that measures a firm's
ability to pay off its short-term liabilities with its currentassets.inthis situation
company current ratio around 0.84:1 that shows that company not able to
pay their current liabilities
2. Quick ratio/acidtest ratio:
=Cash + account receivable/current liabilities
=13,942+11,177/45,892
0.5473503007060054
Explanation:

25. Quick Ratio is an indicator of company's short-term liquidity, the quick ratio, also known
as the acid-test ratio is a type of liquidity ratio which measures the ability of a company
to use its near cash or quick assets to pay its current liabilities immediately.
In 2017 it has 0.20 rupees to fulfill its ability. In this situation company
must give loan or any source of money.
3. Cash ratio/ absolute quick ratio:
=Cash /current liabilities
= 13,942/45,892
0.3038002266190186
Explanation. The cash ratio tells us how much we have cash to pay our short
term liabilities
This statement shows that cash is insufficient to pay short term
liabilities.
4: Return on total assets:

26. = EBIT/ total assets*100
= (-2,355) + (-5,688)/ 122,281*100
= -6.577473196980725
Explanation:
Return on total assets (ROTA) is a ratio that measures a company's earnings
before interest and taxes (EBIT) relative to its total net assets.
5: Return on Equity:
=EAT/equity*100
=-3,855/14,987*100
-25.72229265363315
Explanation:
The return on equity ratio or ROE is a profitability ratio that measures the
ability of a firm to generate profits from its shareholders investments in the
company
6: Inventory Turnover Ratio:
= Cost of goods sold/ average inventory/2
=78,660/((2,678+2,538/2)

27. 30.161042944785
Explanation:
The return on equity ratio or ROE is a profitability ratio that measures the
ability of a firm to generate profits from its shareholders investments in the
company
7: Inventory turnover in times:
= 365/inventory turnover ratio
=365/ 30.161042944785
12.10170353419792
Explaination:
It indicates how many days the firm averagely needsto turn
its inventoryinto finish goods.
8: Account Receivable Turnover Ratio:
=credit sales/ (average account receivable/2)
=78,660/ (11,177+9,420/2)
7.638006
Explaination:
The accounts receivable turnover ratio measures how many times a business
can collect its average accounts receivable during the year.

28. 9: Account Receivable Turnover Ratio in times:
=365/account receivable turnover ratio
= 365 /7.638006
47.7873
Explanation:
The accounts receivable turnover ratio measures how many days a business
can collect its average accounts receivable during the year
10: Account payable Turnover Ratio:
=cgs/ (average account payable/2)
=78,660/ (18,334+14,422/2)
4.802784
Explaination:
The accounts payable turnover ratio shows how efficient a company is at paying its
suppliers and short-term debts.
11: Account payable Turnover Ratio in times:
=365/ account receivable turnover ratio
=365/4.802784
75.99758
Explanation:
The accounts payable turnover in days shows the average number of days that a
payable remains unpaid. To calculate the accounts payable turnover in days, simply
divide 365 days by the payable turnover ratio.

29. Comparison HP Dell
Current ratio 1:0.08 1: 0.84
Quick ratio 1: 0.4 1: 0.54
Cash ratio 1: 0.2 1: 0.30
Inventory turnover ratio 1: 8.06 1: 30.1
Return on total assets 1:5.6 1: -6.5
Return on Equity 1: 8.06 1: -25.7