Hp Analysis Article Essay

880 Words Aug 28th, 2012 4 Pages
Founded in a garage in 1939 and incorporated in 1947 by two Stanford University classmates, Hewlett-Packard is world’s leading PC manufacturer with a vast array of products including laptops, tablet PCs, printers, smart phones, monitors and workstations. Having market capitalization of $37.15 billion HP has been a stock favorite for the investors due to its non-volatility in share prices, increasing profits for a long period of time and high dividend yield.
With its headquarters located in Palo Alto, CA Hewlett Packard had its first customer in form of Walt Disney who purchased their foremost product precision audio oscillator. In earlier days company had a very wide range of products but gradually decided to focus on their
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The latest audited financial statements confirm EPS (Basic and Diluted) over $3 per share with a price to earnings ratio of 7.3 which is much better than its competitors whose financial statements suggest high share prices but low earnings.
A current market price of $18.87, HP’s share price almost doubled in June 2011 and was traded at $37.7 but then came back to a normal slab of $26.50 to $18.50. Financial performance has show better results and therefore the company is worth investing in the long term being a computer giant with highest number of competitive advantages in the industry segment.
Basic Ratios
When we take a look at the company financial statements and its marketing capabilities it shows future signs of profits and increase in the market share. Current ratio of 1.01 is not up to the mark of the industry but its more than one negating any signs of liquidity crisis. Operating margin were 7.61%, 9.32% and8.85% for the last three years and profit margin 5.56%, 6.95%% and 6.69% for the years mentioned above. The major reason for decline of shares was the reduction in the weighted number of shares in the year 2011 in which the ratio had been less which can also be supported through a very minute change in the EPS figure.
DuPont Analysis of HP and its competitors
If we compare HP with

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