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Please answer the attached questions. (Please check sheet 1 for instructions)

Perform stress testing under scenarios of likely adversity and value your firm using appropriate valuation technique pro forma financial data analysis you constructed earlier in the course. Compare your results from step #1 against the current stock price of your chosen company and competitor. Constru argument in favor of investing in either the chosen company, or the competitor, with sufficient supportive detail an to make your case. Step 8: Stress Test under Scenarios of Adversity Financing plans typically work well if the assumptions on which they are based turn out to be accurate. However, this is an insufficient test in situations marked by volatile and unpredictable conditions. The test of the soundness of a 3-5 year plan is whether the continuity of the flow of funds to all strategically important programs can be maintained under various scenarios of adversity for the firm and/or the capital marketsor at least be maintained as well as your competitors are able to maintain the funding of their programs. Step 9: Current Financing Plan How should the firm meet its financing needs in the current year? How should it balance the benefits of future financing flexibility (by selling equity now) versus the temptation to delay the sale of equity by financing with debt now, in hopes of realizing a higher price in the future? The next section of this note is designed to provide familiarity with the financial measures that can be useful in understanding the past performance of a company. Extrapolation of the past performance, if done thoughtfully, can provide valuable insights as to the future health and balance of the corporate financial system. Historical analysis can also identify possible opportunities for improved asset management or margin improvement, as well as provide an important, albeit incomplete, basis for evaluating the attractiveness of a business and/or the effectiveness of a management team. riate valuation techniques on the y and competitor. Construct an cient supportive detail and/or data o be table ow of funds rsity for the e able to the ay the sale that can d balance es for beit of a Millions $ ,B Interest income Total interest income Interest expense Total interest expense Net interest income Noninterest income Total noninterest income Total revenue, net of interest ex Provision for credit losses Noninterest expense Total noninterest expense Income before income taxes Income tax expense Net income Preferred stock dividends Net income applicable to commo 1.05 2016 59,760 2017 62748 2018 65885 12,659 47,101 13292 49456 13957 51929 51,907 99,008 3,793 54502 103958 3983 57227 109156 4182 68,630 26,585 7,519 19,066 1,780 $ 17,286 72062 27914 7895 20019 1869 18150 75665 29310 8290 21020 1962 19058 NOTE* Proforma statement highlights major components of a financial statement and pro 2019 69180 2020 72639 2021 76271 14654 54525 15387 57252 16156 60114 60089 114614 4391 63093 109156 4610 66248 114614 4841 79448 30775 8704 22071 2061 20011 83420 32314 9139 23175 2164 21011 87591 33930 9596 24334 2272 22062 nents of a financial statement and projects its future cash flow in a given period of time using Beta(B) as highlighted here. s highlighted here. Debt Paying Ability Ratios & Formulas Times Interest Earned Ratio TIE = Net Operating Income / Interest Expense Debt Ratio Debt Ratio = Total Liabilities / Total Assets Liabilities to Equity Ratio Liabilities to Equity Ratio = Total Liabilities / Total Equity Year Fiscal Debt Ratio Analysis 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 Profitability/Investor Ratios & Formulas Gross Profit Margin GPM = Gross Profit / Net Sales Operating Profit Margin OPM = Operating Income / Sales (Net) Year Fiscal ii) Profitability Ratios 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 Net Profit Margin(NPM) Net Income / Net Sales Total Asset Turnover (TO) Total Asset =Sales / Average Total Assets DuPont Return on Assets DuPont ROA = Net Profit Margin x Total Asset Total Asset Turnover Financial Leverage Ratio FLR = Total Assets / Total Equity DuPont Return on Equity DuPont ROE = DuPont ROA x FLR 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 iii)Liquidity Ratios Fiscal Year Liquidity Ratios & Formulas Accounts Receivable Turnover in Days Accounts Receivable Turnover in Days = 365 / Accounts receivable turn over Accounts Receivable Turnover AR TO = Net Sales / Avg Gross Receivables Inventory Turnover in Days ITO in Days = 365 / ITO 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 2021 Inventory Turnover in Days ITO in Days = 365 / ITO Inventory Turnover ITO = COGS / Avg Inventory Current Ratio Current Ratio = CA/CL Quick Ratio Quick Ratio = (CA- Inventory) / CL Cash Ratio Cash Ratio = (Cash + CE / CL 2020 2019 2018 2017 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 Average Industry Dell Company 10.4 10.5 10.7 9.9 10.5 63.00% 56.00% 57.00% 56.00% 53.00% 78.40% 78.30% 77.80% 75.90% 73.30% 1.7 1.3 1.3 1.3 1.4 3.5 3.3 3.4 3.3 3.3 Dell Company Average Industry 12.8 15.7 15.6 16.3 15.8 17.30% 19.90% 19.80% 20.00% 20.00% 28.60% 28.70% 30.30% 30.00% 29.80% 13.10% 12.80% 12.40% 10.40% 13.60% 10.60% 10.20% 10.70% 11.00% 10.60% 5.40% 5.80% 6.00% 6.30% 6.00% 2.4 2.4 2.1 2 2.2 1.7 1.6 1.6 1.7 1.6 20.90% 19.00% 13.20% 20.20% 18.50% 9.10% 9.10% 9.80% 10.50% 9.90% 2.6 2.6 2.6 2.7 2.5 3.9 3.8 3.9 3.9 3.7 53.80% 48.60% 34.10% 54.40% 46.20% 34.80% 34.00% 37.10% 39.20% 36.60% Industry Average Dell Company 8.70% 7.90% 6.30% 10.10% 8.40% 8.1 8.9 7.7 6.5 7.0 45.2 41.0 47.3 56.4 48.6 68.7 11.2 11.0 10.7 11.5 11.4 73.0 65.7 72.0 67.0 66.0 70.9 68.3 64.9 63.7 62.6 5.3 5.3 5.6 5.7 5.4 1.5 1.5 1.6 1.5 1.3 1.6 1.7 1.5 1.5 1.4 0.8 0.9 0.7 0.7 0.7 68.2 61.6 58.8 59.2 5.2 5.4 5.9 6.2 5.6 1.8 2.0 2.2 2.1 2.5 1.2 1.4 1.6 1.7 2.0 0.3 0.4 0.6 0.7 0.8 Debt Paying Ability Ratios & Formulas Times Interest Earned Ratio TIE = Net Operating Income / Interest Expense Debt Ratio Debt Ratio = Total Liabilities / Total Assets Liabilities to Equity Ratio Liabilities to Equity Ratio = Total Liabilities / Total Equity Year Fiscal Debt Ratio Analysis 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 ii) Profitability Ratios year Profitability/Investor Ratios & Formulas Gross Profit Margin GPM = Gross Profit / Net Sales Operating Profit Margin OPM = Net Operating Income / Net Sales Fiscal 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 Net Profit Margin NPM = Net Income / Net Sales Total Asset Turnover TATO = Sales / Average Total Assets DuPont Return on Assets DuPont ROA = NPM x Total Asset TO Financial Leverage Ratio FLR = Total Assets / Total Equity DuPont Return on Equity DuPont ROE = DuPont ROA x FLR 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 Liquidity Ratios & Formulas Accounts Receivable Turnover in Days AR TO in Days = 365 days / Accounts recivable turnover in days Accounts Receivable Turnover AR TO = Net Sales / Avg Gross Receivables Inventory Turnover in Days ITO in Days = 365 / ITO Fiscal Year iii)Liquidity Ratios 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 2021 2020 2019 Inventory Turnover in Days ITO in Days = 365 / ITO Inventory Turnover ITO = COGS / Avg Inventory Current Ratio Current Ratio = CA/CL Quick Ratio Quick Ratio = (Current Assets - Inventory) / CL Cash Ratio Cash Ratio = (Cash + Cash Equivalents) / CL 2018 2017 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 2021 2020 2019 2018 2017 Average Industry HP Company 10.4 10.5 10.7 9.9 10.5 81.0% 77.0% 79.0% 76.0% 70.0% 78.40% 78.30% 77.80% 75.90% 73.30% 4.2 3.8 4.0 3.6 3.3 3.5 3.3 3.4 3.3 3.3 HP Company Average Industry 11.2 11.7 13.0 12.2 9.1 8.0% 9.2% 11.4% 10.1% 9.6% 28.60% 28.70% 30.30% 30.00% 29.80% 9.4% 10.1% 10.5% 11.2% 12.4% 10.60% 10.20% 10.70% 11.00% 10.60% 5.40% 5.80% 6.00% 6.30% 6.00% 1.9 2.0 1.7 1.8 1.9 1.7 1.6 1.6 1.7 1.6 10.5% 10.2% 11.1% 14.2% 15.2% 9.10% 9.10% 9.80% 10.50% 9.90% 3.1 3.1 3.0 2.8 3.1 3.9 3.8 3.9 3.9 3.7 31.9% 31.3% 33.0% 39.9% 47.1% 34.80% 34.00% 37.10% 39.20% 36.60% Industry Average Dell Company 5.5% 5.1% 6.5% 7.9% 8.0% 9.8 10.4 9.6 10.0 9.5 54.0 49.0 49.9 50.0 48.0 115.9 114.8 102.8 11.2 11.0 10.7 11.5 11.4 73.0 65.7 72.0 67.0 66.0 70.9 68.2 61.6 96.2 100.2 3.1 3.2 3.6 3.8 3.6 0.7 0.8 0.7 0.7 0.9 0.4 0.5 0.4 0.6 0.9 0.2 0.3 0.2 0.4 0.8 58.8 59.2 5.2 5.4 5.9 6.2 5.6 1.8 2.0 2.2 2.1 2.5 1.2 1.4 1.6 1.7 2.0 0.3 0.4 0.6 0.7 0.8 B Interest income Total interest income Interest expense Total interest expense Net interest income Noninterest income Total noninterest income Total revenue, net of interest expense Provision for credit losses Noninterest expense Total noninterest expense Income before income taxes Income tax expense Net income Preferred stock dividends Net income applicable to common shareholders 1.08 2016 49,800 2017 53784 2018 58087 10,549 39,251 11393 42391 12304 45782 43,256 82,507 46716 50454 3,161 89108 3414 96236 3687 61767 66709 23926 6767 17159 1602 25840 7309 18532 1730 15557 16802 57,192 22,154 6,266 15,888 1,483 $ 14,405 2019 62734 2020 67752 2021 73173 13289 49445 14352 53401 15500 57673 54490 58849 63557 103935 3982 112250 4301 121230 4645 72045 77809 84034 27908 20014 20014 1868 30140 21615 21615 2018 32551 23345 23345 2179 18146 19598 21166