FINANCIAL ANALYSIS OF DELL AND HP Executive Summary

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This financial analysis report examines two high profile competitors, Dell and Hewlett Packard (HP), within the computer/technology industry in order to evaluate company performance and financial health. Overall company strategies were reviewed and considered along with the financial analysis to come to a conclusion for recommendation of investment. The reports introduction gives an overview to the computer/technology industry and expands on the strategies executed by Dell and HP. The financial analysis covers both companies’ common-size income statements and balance sheets, comparative income statements and balance sheets, and various financial statement ratios such as …show more content…

In part, pressures to add customers have lead to price wars between the two competitors. However, the price wars have not affected the quality of the products in those lower priced tiers. Both firms have increased marketing efforts to enhance their brand recognition and strived to reduce cost through improved supply chain management and technology innovation. Both companies have room for growth, especially as they enter the portable tablet market. It will also be interesting to see how HP fairs in the cell phone market with its recent acquisition of the company Palm and how Dell with react to their success or failure within this market segment.

Objectives

FINANCIAL ANALYSIS OF DELL AND HP The primary objectives for this financial analyst report are to compare two major companies within the computer/technology industry, Dell and HP. Suggestions for company improvement will be discussed as well as recommendations for investment. A pro forma financial analysis for each company’s expected performance for 2011 will be conducted and

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assumptions that lead to these figures. The company’s performance will cover the years spanning from 2006 through 2010, with analysis of each company’s common-size income statement, common-size balance sheet, comparative income statement, comparative balance sheet and financial statement ratios.

Financial Analysis Common-Size Analysis