# Financial Statement Analysis Mini-Project The financial

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May 14, 2015. Financial Statement Analysis Mini-Project The financial analysis project is designed to develop your ability to (1) understand and analyze published financial reports and (2) make a recommendation to investors regarding the financial condition of a public company. This project can be completed entirely in Microsoft Excel. You should use the appropriate financial statements, and can include those statements in the Excel file with cell references in the formulas to guard against mathematical errors. It is important to fully address the question being asked. When answering the questions, make sure to double-check your calculations. Be sure to include your results as well as a detailed explanation/interpretation of the information. Any use of outside reference materials should be cited. 1. Calculate the following ratios needed to assess liquidity and interpret the results. This should include the last 3 years of ratios for the company and the last 3 years of ratios for the competitor. What trends are there? (approx. 1/2 page single spaced 12 pt. in Word doc) a. Current Ratio b. Acid-Test (Quick) Ratio c. Receivables Turnover d. Inventory Turnover e. Asset Turnover 2. Calculate the following ratios needed to assess long-term debt-paying ability and interpret the results. This should include the last 3 years of ratios for the company and the last 3 years of ratios for the competitor. What trends are there? (approx. 1/2 page single spaced 12 pt. in Word doc) a. Times Interest Earned b. Debt to Total Assets Ratio c. Book Value per Share 3. Calculate the following ratios needed to assess profitability and interpret the results. This should include the last 3 years of ratios for the company and the last 3 years of ratios for the competitor. What trends are there? (approx. 1/2 page single spaced 12 pt. in Word doc) a. Profit Margin on Sales b. Rate of Return on Assets c. Rate of Return on Common Stock Equity d. Earnings per Share e. Payout Ratio 4. Which company would you invest in? What are the reasons for your decisions? This should be based on financial analysis and significant facts. (approx. 1 page single spaced 12 pt. in Word doc) Attached files: Balance sheets and Income Statements for Dell and HP ATTACHMENT PREVIEW Download attachment Financial Statement Analysis Mini-Project.xls Hewlett-Packard Co (NYS: HPQ) Exchange rate used is that of the Year End reported date As Reported Annual Balance Sheet Report Date 10/31/201 10/31/201 4 3 Currency USD USD Audit Status Not Not Qualified Qualified Consolidated Yes Yes Scale Millions Millions Cash & cash equivalents 15133 12163 Available for sale debt securities Short-term investments Accounts receivable, gross 14064 16208 Allowance for doubtful accounts 232 332 Accounts receivable 13832 15876 Financing receivables, gross Allowance for doubtful accounts Financing receivables Financing receivables 2946 3144 Finished goods 3973 3847 Purchased parts & fabricated assemblies 2442 2199 Inventory 6415 6046 Deferred tax assets – short-term 2754 3893 Value-added taxes receivable from various governments 2169 2425 Supplier & other receivables 2378 2579 Prepaid & other current assets 4518 4238 Other current assets 11819 13135 Total current assets 50145 50364 Land 540 626 Buildings & leasehold improvements 9048 8942 Machinery & equipment, including equipment held for lease 16664 16565 Property, plant & equipment, gross 26252 26133 Accumulated depreciation 14912 14670 Property, plant & equipment 11340 11463 Financing receivables, net 3613 3878 Deferred tax assets – long-term 740 1346 Deferred costs – long-term 755 999 Other long-term financing receivables & other assets 3346 3333 Long-term financing receivables & other assets 8454 9556 Goodwill 31139 31124 Purchased intangible assets Intangible assets 2128 3169 Total assets 103206 105676 Current portion of long-term debt 2655 5226 Commercia…