Suppose you wanted to compare the fiscal year 2013 revenue of Hewlett Packard (HP) with the fiscal year 2013 revenue of Dell. Which numbers would you compare? Which financial statement provides more information, Dell or HP? Why? What might you infer from the disclosure differences on the income statement?

Dell

2. Using only the information provided, which company has higher gross margin percentages on computer sales? Which company has higher computer sales growth? As a percentage of total revenue, which company has higher SG&A? Higher R&D? Higher operating expenses? What do these differences tell you about the operations of these two companies?

February 1, 2013 Dollars % of Revenue $ 44.744 12.196 56,940 78.6% 21.4% 100.0% $ $ Net revenue: Product Services, including software related Total net revenue Gross margin: Product Services, including software related Total gross margin Operating expenses Operating income Net income Earnings per share diluted 18.0% 33.8% $ $ 8,061 4,125 12.186 9,174 3,012 2,372 1.35 21.4% 16.1% 5.3% 4.2% $ $ NA $ 22.3% $ 15.3% Other Financial Information (@ Non-GAAP gross margin Non-GAAP operating expenses Non-GAAP operating income Non-GAAP net income Non-GAAP earnings per share - diluted 12,708 8.735 3.973 3,017 $ 7.0% $ 5.3% N/A $ 1.72 HEWLETT-PACKARD COMPANY AND SUBSIDIARIES Consolidated Statements of Earnings For the fiscal years ended October 31 2013 2012 2011 In millions, except per share amounts $ 72,398 $ 39,453 447 112,298 77,887 $ 84,757 42,008 42,039 462 449 120,357 127,245 Net revenue: Products Services Financing income Total net revenue Costs and expenses: Cost of products Cost of services Financing interest Research and development Selling general and administrative Amortization of intangible assets Impairment of goodwill and intangible assets Restructuring charges Acquisition-related charges Total operating expenses Earnings (loss) from operations Interest and other, net Earnings (loss) before taxes Provision for taxes Net earnings (loss) Net earnings (los) per share: Basic Diluted Weighted average shares used to compute net earnings (loss) per share: Basic Diluted 55,632 59,468 30,436 32,600 312 317 3,135 3,399 13,267 13,500 1,373 1,784 18,035 990 2,266 22 45 105,167 131,414 7,131 (11,057) (621) (876) 6,510 (11,933) (1,397) (717) 5,113 $ (12,650) $ 65,167 31.945 306 3,254 13,577 1,607 885 645 182 117,568 9,677 (695) 8,982 (1,908) 7,074 2.64 $ 3.38 (6.41) S (6.41) S 2.62 $ 3.32 1,934 1,950 1,974 1,974 2,094 2,128