Hewlett-Packard Company and Microsoft Corporation Financial Analysis According to company financial for the 2012 fiscal year, HP current ratio is at 1. 09 while Microsoft Corp.. Ratio is at 2. 6 which make HP a lesser candidate to obtain a short- term credit. They would not have enough to pay its current liabilities. Also HP recorded inventories of $6. BIB compared to Microsoft $1 . BIB. If sales for PC’s, tablets, phones and other products dropped, HP would have a difficult time selling its inventory and running the risk of not being able to pay its current liabilities.
Microsoft Corp.. Has a higher inventory turnover rate and a higher cost of goods sold and HP has a lower number of days’ sales in inventory. This meaner that they take less time than Microsoft Corp.. To purchase, sell and replace inventory. Even though HP would have a hard time selling inventory in a crisis, they have managed to have a higher Accounts Receivable Turnover at 5. 18, 0. 4 more than Microsoft Corp.. HP may have a better way of granting and collecting from its creditor. Should you work for HP, well its accrued payroll increased from $48 to $4. B in 2012, this signals that either HP increased the number of employees or they owe wages to employees for 2012. I would not advise anyone to pick up employment at Hewlett-Packard Company currently because they have been having internal issues. This company has changed 2 Coos in 2 years, every time this happens its’ stock drops drastically. The new CEO Meg Whitman wrote, “Fiscal 2012 was the first year in a multi-year Journey to turn HP around. We diagnosed the problems facing the company, laid the foundation to fix them, and put in place a plan to restore HP to growth.
We know where we need to go, ND we are starting to make progress” (Whitman). Whitman built the EBay empire and now she’s at HP turning it around but stockholders are still feeling rocky about their investments. Employees are aware that when HP makes sudden changes in the company their Jobs are at put at stake. In recent stories posted in the Wall Street Journal, the fall out from two research reports signaling the rapid deterioration of the personal-computer industry touched Hewlett Packard Co. And Microsoft corp.. , investors punished two of the companies with the most at stake.
Research firms DC ND Gardner Inc published data showing PC shipments fell as much as 14% in the first quarter, with HP having the sharpest decline at 24%. With the showing of these figures HP investors brought the company shares down 6. 5% to $20. 88. HP suffered the worst quarterly decline in shipments since it acquired Compact Computer in 2003. Hops greatest competition is Chinese manufacturer Leno Group Ltd, they have maintained steadily in the first quarter. Leno have already passed Acre Inc and Dell Inc in terms of global PC shipments. HP still remains the top PC maker.
Shares of Microsoft, whose Windows software powers the majority of PC’s downgraded 4. 9% to $28. 82, after the company’s stock price had touched a six month high. Executives at Intel and Microsoft have said they expect new computer chips and other advancements to drive down the cost of touch screen laptops. Microsoft next big thing is going to be Windows Blue’, its expected to mark major change in the company’s development methodology (Sheer, 2 New machines running Microsoft’s latest touch-enabled operating system, Windows, typically powered by
Intel chips, are so rare as to elicit stares when seen in the wild. Microsoft blames limited distribution. But DC analyst Bob O’ Donnelly points out that such machines have proven to confusing and expensive. Microsoft hopes to boost PC’s sales after ending support for Windows XP in 2014, as XP users upgrade to Windows 7. Since Intel and Microsoft go hand in hand, the downfall of the chip producing company Intel has cause some problems for Microsoft. Apple’s and Google’s mobile operating systems and chip technology is powered by Intel rival Arm Holdings.
Intel has to improve their technology because software developers are going to companies with more popularity and a bigger mobile device and tablet market. These changes are driving the PC market down which may eventually force Microsoft and Intel to accept lower profits by lowering prices for Windows devices (Hinkler, 2013). Since the posting of the research report on April 12th 2013, as of April 19th 2013, HP stock has dropped to $19. 56 while Microsoft has increased to $29. 76. The Earnings per Share on Common Stock for HP is $-6. 55, which meaner the company is loosing money.
I would advice someone not to buy shares in this company. The PEPS for Microsoft is 1. 83; this company pays more profit per share. Microsoft Price-Earning Ratio was recorded at 16. 27 and HP recorded EN, this indicates that the market expects Microsoft to have a favorable earnings in the future when compared to HP. Also Microsoft has a Dividend Yield at 3. 20 with HP at 2. 61 (Nasdaq). The higher the dividend yield the more an investor would be interested in the stock. I will advise an investor to purchase stocks in Microsoft, they have a net income of $16. BIB marred to HP -$12. B (Marketplace). Also Microsoft is making a big splash in the technology industry. They have introduced Windows 8 which debuted in October 2012 making advancement in the software program. HP and Microsoft are aware that there is going to be a decline in the PC market but you can still purchase stocks in Microsoft because they have about an 85% share of the PC operating systems. This company has put itself in place for the stock drop by entering the phone and tablet market. Monika have partnered up with the PC powerhouse to launch the Windows 8 hone, it has made a huge global reach.
After making such an impact in the phone market, why not make a big one in the tablet market too. That is Just what Microsoft did; they took the Windows 8 and placed it in a tablet, the Surface. The Surface tablet sales were low and the company re-launched with Surface Windows 8 Pro. Entering the tablet market put Microsoft at risk because Apple Inc has dominated the tablet market with the pad. Microsoft has gained the hearts of corporate America because the Surface Windows Pro 8 has the same capability of a PC with full keyboard.
Also, it is the only tablet that runs Microsoft Office which is widely used in homes and offices throughout the world. Its launch of the new Office 365 (Microsoft. Com) in March 2013 for the corporate world let consumers access the office application on different devices such as, PC, tablets and phones powered by Microsoft. With the comparisons of these two companies, I may advise someone to take over Microsoft Corporation because it show high numbers on its financial statements and a clear part into the future with Surface Windows 8 Pro.