Weeks 2 through 5 Discussions: A discussion topic related to the SEC 10-K project will be posted each week
Weeks 2 through 5 Discussions:
A discussion topic related to the SEC 10-K project will be posted each week. Use the Weeks 1-6 Discussions postings strategically to prepare drafts of your Word document report, Excel spreadsheet, and PowerPoint presentation.
Use the Excel spreadsheet for supporting computations and schedules for vertical and horizontal analysis of key financial indicators of performance. You should always show changes from the base year as percentages, so the spreadsheet can be a really helpful tool to support your Discussion postings over Weeks 2-5. Focus exclusively on cost accounting-related information and ratios in your spreadsheet.
Week 1 Discussion:
I will choose Hewlett-Packard (HPQ) the reason for this is because I am typing on a HP. This product is 58 on the list and can be very beneficial in the future of all computers and printers.
The financial statements are as follows:
a. Income Statement on page 64
b. Balance Sheet on page 66
c. Stockholders Equity page 69
week 2 discussion 2
1. Company profile and business:
Hewlett Packard Company (also known as HP) is an American multinational information technology company which is into personal computing and other access devices, imaging and printing products and its related technologies, solutions and services. The company head office is in Palo Alto, California. The company was incorporated in 1947 by Bill Hewlett and David Packard (Gardner, D. 2003.) The company’s customers are individuals, small and medium-sized businesses and large businesses including customers in government, health and education sectors. HP has a presence worldwide and has significant revenue outside the USA. Hewlett-Packard provides products in details; the company offers commercial and consumer PCs, workstations, thin clients, retail POS systems, consumer and commercial desktops & notebooks, consumer and commercial printer hardware, supplies, scanning devices, office and home printing solutions.(Hewlett Packard, n.d.)
2. Trend analysis:
The profitability analysis of HP is as below:
Particulars 2015 2016 2017
Net Revenue 51,463,000,000 48,238,000,000 52,056,000,000
Cost of Revenue 41,524,000,000 39,240,000,000 42,478,000,000
Gross Profit 9,939,000,000 8,998,000,000 9,578,000,000
Earnings from continuing operations (Operating) 3,920,000,000 3,549,000,000 3,519,000,000
Net earnings 4,554,000,000 2,496,000,000 2,526,000,000
In the fiscal year 2017, net revenue has been increased by 7.91% in comparison to the year 2016 whereas, in the fiscal year 2016, the revenue has been decreased by 6.27% in comparison to the fiscal year 2015.
In the fiscal year 2017, Cost of revenue has been increased by 8.25% in comparison to the year 2016 whereas, in the fiscal year 2016, the cost of revenue has been decreased by 5.50% in comparison to the fiscal year 2015.
In the fiscal year 2017, Gross profit has been increased by 6.45% in comparison to the year 2016 whereas, in the fiscal year 2016, gross profit has been decreased by 9.47% in comparison to the fiscal year 2015.
In the fiscal year 2017, Earnings from continuing operations (operating margin) has been decreased by 0.85% in comparison to the year 2016 whereas, in the fiscal year 2016, Earnings from continuing operations has been dropped by 9.46% in comparison to the fiscal year 2015.
In the fiscal year 2017, Net earnings have been increased by 1.20% in comparison to the year 2016 whereas, in the fiscal year 2016, Net earnings have been decreased by 45.19% in comparison to the fiscal year 2015.
The gross profit margin in 2015 is 19.31%, in 2016 is 18.65% and in 2017 is 18.40% of net revenue. The operating margin in 2015 is 7.62%, in 2016 is 7.36% and in 2017 is 6.76% of net revenue. The main reason for the decrease in gross was lower personal system margin due to increase in higher commodity cost, the unfavorable impact of foreign currency, and so forth. The revenue has been increased in 2017 in comparison to the year 2016, but earnings have been decreased in 2017 from 2016 due to increase in operating cost and production cost.
3. Segment reporting analysis:
The Hewlett Packard operates into three segments: Personal Systems, Printing, and Corporate Investments.
Personal systems segment provides commercial and consumer PCs, thin clients, industrial and consumer tablets, retail POS system and other related accessories, software, support and other services for computer markets. The personal system includes notebooks, desktops, and workstations, and so forth. Under Printing, segment provides consumer and commercial printer hardware, solutions, supplies and services, scanners, graphics solutions and consumables products such as inks, 3D printing supplies. Under Corporate Investments segment HP labs and specific business incubation projects.
Gardner, D. (2003). William Redington Hewlett, 20 May 1913 • 12 January 2001. Proceedings of the American Philosophical Society, 147(2), 162-166. Retrieved from https://www.essaybishop.com/write-my-essay/jstor.org.ezproxy.umuc.edu/stable/1558259
Hewlett Packard Enterprise n.d. retrieved on Septmber 1, 2018. From https://www.hpe.com/us/en/home.html
Hewlett Packard Enterprise, n.d. retrieved on September 1, 2018 from http://investors.hpe.com/financial/annual-reports
week 2 discussion 2
1. Inventory disclosures
Hewlett Packard finished goods were USD 3,857 million and their purchase parts, and fabricated assembly is USD 1,929 million. So that total inventory in the year 2017 was USD 5,786 million. If we look into the 2016 inventory disclosure, then finished goods were USD 3,103 million and purchase parts, and fabricated assemblies were USD 1,381 million. So total inventory for the year 2016 was USD 4,484 million. So, the overall increase in the inventory is 29% from 2016 to 2017. As per disclosure, Hewlett Packard uses FIFI method for inventory valuation.
2. Cost and sources for production materials
The company adjusts to reduce the cost of inventory to its net realizable value at the product group level for estimated assess or obsolescence. The factors which are influenced by this adjustment include changes in demand, changes in technology, product lifecycle, development plan, product price, and quality issue. Their cost of production increased due to higher commodity price, unfavorable foreign currency impact and a higher mix of personal system revenue, partially offset by productivity improvement in printing.
3. SWOT Analysis
Strength – Hewlett Packard has an excellent brand valuation and ahead of many consumer durable segments. It has a 10th rank in the IT industries, and their production is very remarkable. Their research and development are also at the very high level, and they spend highly on research to stay ahead of technological.
Weakness – The demand of the printing system and personal computer are decreased in the last few years. Their financials are also weak during the year 2017 and their services after sales are poor quality, especially in the emerging market.
Opportunity – 3D printing manages the prints services market and electronic market.
Threats – Product challenges, competitions, and smartphones.
Securities and Exchange Commission, December 15, 2017. Retrieved on September 10, 2018 from http://h30261.www3.hp.com/~/media/Files/H/HP-IR/documents/reports/2018/2017-10-k.pdf
Hewlett Packard SEC Report retrieved on September 9, 2018 from https://www.sec.gov/Archives/edgar/data/47217/000004721717000043/hp-103117x10k1.htm