"NAME: __________________________________________ID: _______________COMPANY _________________________1Hewlett PackardSYMBOLSTUDENT NAME:ID NUMBER:NAME: __________________________________________ID: _______________COMPANY _________________________2Our company X was considering to hire a company to supply general business machines which have since become obsoleteand outdated.These machines include computers, phones, photocopying machines and other communication devices. The companyhad put up a tender advertisement to supply the above products and after a successful selection process, it settled on Hewlett Packard(HP) products. HP offers a wide range of products: Printers, Hp Software, converged cloud products, digital cameras, tabletcomputers, mobile phones, pocket computer, desktop calculators and computers, business desktops, thin clients, personal desktops,notebooks, workstations, servers, enterprise storage, pro curve, telepresence and video conferencing, external hard disks and otherproducts. This wide range of products to choose from gave HP the first advantage.HP is a publicly trading company on the New York Stock Exchange (NYSE) as HPQ,S&P 500 component. The company wasfounded in 1939 by Bill Hewlett and Dave Packard. It has headquarters in Palo Arto, California United States and sells its productsworldwide. The company was the world’s leading PC manufacturer as from 2007 to the 2013 second quarter before it was overtakenby LENOVO which has since maintained the position. In the recent past, the HP company has had spin offs and the major merger withth COMPAQ in 2003 led to a remarkable increase in revenue in 2009 to $11.4 billion giving it Fortune 500 9 position ranking. Thecompany also acquired EDS in 2008, 3com in 2009 and Palm Inc. in 2010. In 2014 HP had planned to split its PC and printers forenterprise and business services. These many acquisitions led to a fall in revenue, operating income, net income, total assets and totalequity but it has since picked up as evidenced by recent price movements. (Yahoo Finance, 2014). NAME: __________________________________________ID: _______________COMPANY _________________________3HP has a stable financial muscle and supplies excellent products globally, which makes it a better bid due assured consistencyin quality, quantity and services. The company enjoys a big consumer market especially in the US where it is headquartered. HP wasthe first company to manufacture a personal computer and a touch screen computer which is a credit for a history of committed qualityservice and innovation; our company needs such a client. Furthermore, HP participates in many exhibitions globally and most recentlyit partnered with Print China 2015 in organizing The International Printing Technology Exhibition of China in Guangdong. It isreported further that the 2012 Drupa Exhibition HP managed to sign more than 200 contracts with clients from 55 countries. Thecompany still is the best in digital printing products,((Print China, 2015).To understand and prove why HP is the best supplier according to our selection, we tale a company analysis to see how thecompany’s stock has been performing in the past years. This will help us gauge the certainty of future activity. This report will alsoanalyses the news items which might have triggered the behavior of prices over the previous years.Activity 4. Trend of the Stock (Increasing/Decreasing).This activity will look at the trend of the stock prices at close of the market to gain insight on its trend. NAME: __________________________________________ID: _______________COMPANY _________________________4a) Weekly Closing Price Trend over the Last YearFigure 1.1: Graph showing the trend of closing price for the HP Stock over the last year. NAME: __________________________________________ID: _______________COMPANY _________________________5This graph shows that the price changes have been stable, since there are not witnessed extremes. However the prices seems to befalling as from December but a review of the long-term period might give us a better trend. NAME: __________________________________________ID: _______________COMPANY _________________________6b) 5 year trend of the HP stock closing priceFigure 1.2: Graph showing the trend of HP closing stock price over the last year. NAME: __________________________________________ID: _______________COMPANY _________________________7We can see from the above graph that the company is recovering from a dip in 2012 notwithstanding the current temporary fall inprice. This major trend, if anything to go by, could mean that the financial performance of the company is bound to increase in future.c) 10 year trend for the HP closing stock priceFigure 1.3: Graph showing the trend of HP stock closing price for the last 10 years. NAME: __________________________________________ID: _______________COMPANY _________________________8The 10 ten year trend is even clearer. The company seems to be undergoing one of its periodic fall and rise in prices whichmight be attributed to general seasonality in production and sales. The above trend shows the company has recovered from such cyclesin prices before and by virtue of its financial muscle, it will no doubt be stable in the foreseeable future hence a better option.According to the 2014 annual financial results, many reasons have been put forward to explain the inconsistency in the prices.Seasonality in demand for example in the various consumer markets served by HP have a huge impact on the earnings and hence theprices. For example the sales in the European market are often lower in the spring and start of summer. Competition is also anotherfactor. With the increase in demand for mobility in devices, the personal computer market sales have since declined. The software andhardware faces competition from LENOVO, IBM, Apple Inc. and Toshiba Inc. these competitive forces have tremendous impact onthe prices. Lastly there is the environment. HP serves wider market whose legal and political environment especially on corporatepolicy may have a great impact on sales hence the prices. Nevertheless HP company’s innovation and a large market have no doubtmaintain her profitability and quality products and service, (HPQ, 2014).Activity 5: Correlation between the opening and the closing price of HP for the 10-Year period.The Pearson correlation coefficient shows the strength and direction of the relationship. If the coefficient is closer to zero, thenthe relationship is weak but as it approaches ±1, the relationship tends to be stronger A positive coefficient implies a directrelationship between the variables and a negative implies an indirect relationship.(Higgins, 2005).NAME: __________________________________________ID: _______________COMPANY _________________________9a) Correlation between the Opening and the Closing PriceDescriptive StatisticsMean Std. Deviation NOPEN PRICE 34.9043 9.98659 122CLOSE PRICE 35.0036 9.93425 122Correlations OPEN PRICE CLOSE PRICE** OPEN PRICE Pearson Correlation 1 .962Sig. (2-tailed).000N 122 122** CLOSE PRICE Pearson Correlation .962 1Sig. (2-tailed).000N 122 122**. Correlation is significant at the 0.01 level (2-tailed).From the analysis above, there is a strong positive correlation between the opening and closing price as shown by the strongco-efficient correlation of +0.962. This implies that the variables have a 96.2% correlation which in simple terms means a change inopening price accounts for up to 96.2% change in the closing price. NAME: __________________________________________ID: _______________COMPANY _________________________10b) Correlation between the closing price and the volume traded for the 10 year period.Descriptive StatisticsMean Std. Deviation NCLOSE PRICE 35.0036 9.93425 122VOLUME OF TRADE 1.7942E7 6.32688E6 122CorrelationsVOLUME OF CLOSE PRICE TRADE** CLOSE PRICE Pearson Correlation 1 -.287Sig. (2-tailed).001N 122 122** VOLUME OF TRADE Pearson Correlation -.287 1Sig. (2-tailed).001N 122 122**. Correlation is significant at the 0.01 level (2-tailed).In the above case, the correlation is quite the opposite. The two have a -0.287 correlation co-efficient. This means that the twovariables are negatively correlated and because the value is less than 0.5, it means the relationship between the two is weak. Put NAME: __________________________________________ID: _______________COMPANY _________________________11simply, this implies that changes in the volume of trade are only affected to a small percentage by the closing price (28.7%) the rest isexplained by other factors.Correlation graphs supporting the above facts.Figure 1.4: Graphs showing the correlation between the opening and closing price.It is clear from the two graphs above that the relationship between the opening and closing price is both strong and positive.The graph on the left show an upward trendimplying a positive correlation while that on the right has most of the points on a straightline implying a strong relationship. Compare this with the relationship between closing price and volume of trade shown below. NAME: __________________________________________ID: _______________COMPANY _________________________12Figure 1.5: Graphs showing the correlation between closing stock price and the volume of trade.These two graphs show the exact opposite. First from the graph on the left we see that, the trend is downward slopingindicating a negative correlation. The graph on the left shows that many of the points are actually not on a straight line but throwhaphazardly which implies a weak relationship.NAME: __________________________________________ID: _______________COMPANY _________________________13Referencesth Hewlett Pacard (HPQ), (2004): The Annual Financial Results 2014. HP Company. Retrieved 7 May 2015 from:http://h30261.www3.hp.com/~/media/Files/H/HP-IR/documents/reports/2015/hpq-annual-report-2014.pdfHiggins, J. (2005). The radical statistician. Retrieved from www.biddle.comHiggins, J. (2005). The radical statistician. Retrieved from www.biddle.comPrint China. (2015, April). HP will Bring All-star Lineup to PRINT CHINA 2015. Retrieved from The 3rd International PrintingTechnology Exhibition of China (Guangdong):http://www.printchina.org/pc2015/c_en.jsp?intNS_ID=1944&intNC_ID=49068th Yahoo Finance, (2015): The Real Chart. Yahoo Finance.Retrieved 7 May 2015 from: http://real-chart.finance.yahoo.com/table.csv?s=HP&a=00&b=1&c=2005&d=11&e=31&f=2014&g=m&ignore=.csv."