This is an extra credit Assignment

For this analysis you need to access historical pre-merger with Amazon Whole Foods financial statements. Please use financial Internet websites (specifically, www.morningstar.com and www.google.com/finance) or the Bloomberg terminal, to analyze Hewlett Packard Co. Once on either website, you simply enter Hewlett Packards ticker symbol (HPQ) to obtain the financial information needed.

Our textbook mentions that financial statement analysis has two major components: a trend analysis, where we evaluate changes in key ratios over time, and a peer analysis, where we compare financial ratios with firms that are in the same industry and/or line of business. We will do both of these types of analysis in this problem.

Through the Morningstar website, you can find the firms financials (Income Statement, Balance Sheet, and Cash Flow) on an annual or quarterly basis for the 5 most recent time periods. In addition, the site contains Key Ratios (Profitability, Growth, Cash Flow, Financial Health, and Efficiency) for 10 years. We will use the Key Ratios on this site to conduct the firms trend analysis. (At the bottom of the screen you will see that you can click Glossary to find definitions for the different ratios. For example, Morningstars Financial Leverage ratio is the same as the Equity multiplier that we use in the textbook.)

On the Google Finance site, you can find the firms financial statements for the 4 most recent years or the five most recent quarters and key financial data for related companies for the most recent year or quarter. We will use the related companies annual data to conduct the firms peer analysis. Notice that when you go to the Related Companies screen, you can add or remove columns. Click on that phrase, and you can check which peer data items youd like to show on the computer screen. Also, once you have chosen the data, you can click on a term, and the companies will be ranked in either ascending or descending order for the specific term selected.

Discussion Questionsnm (please answer questions 5-8 only)

1. Looking at Morningstars Financial Health ratios, what has happened to Hewlett Packards liquidity position over the past 10 years?
2. Looking at Morningstars Financial Health ratios, what has happened to Hewlett Packards financial leverage position over the past 10 years?
3. Looking at Morningstars Profitability ratios, what has happened to Hewlett Packards profit margin (net margin %) over the past 10 years? What has happened to its return on assets (ROA) and return on equity (ROE) over the past 10 years?
4. Identify Google Finances list of related companies to Hewlett Packard. Which is the largest in terms of market capitalization? Which is the smallest? Where does Hewlett Packard rank (in terms of market capitalization)?
5. From the Google Finance site, look at Hewlett Packards liquidity position (as measured by its current ratio). How does this ratio compare with those of its peers?
6. From the Google Finance site, look at Hewlett Packards profitability ratios (as measured by its profit margin, ROA, and ROE). How do these ratios compare with those of its peers?
7. From the Google Finance site, use the DuPont analysis to determine the total assets turnover ratio for each of the peer companies. Once youve calculated each peers total assets turnover ratio, then you can use the DuPont analysis to calculate each peers equity multiplier.
8. From the information gained in question 7 and using the DuPont analysis, what are Hewlett Packards strengths and weaknesses compared to those of its competitors?