Prepare a counterstrategy in the coming year

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IBM and HP The next day, the CFO asks you, your new financial analyst, and the firm's marketing manager to come to his office.

He hands you a file of financial statements from the company's two competitors in the computer hardware industry. He says that the CEO has requested a report analyzing the company's two main competitor's financial statements and predicting their next big moves.

In turn, this will provide him with some guidance on how to prepare a counterstrategy in the coming year for your company. He requests that the team do the following:

1. An interpretation of the health of each company based on the ratios for each company Please look in table for the IBM and HP Ratios

Financial Ratios

IBM

HP

 Gross Margin

50.14%

24.01%

Return on equity

95.13%

78.21%

Current ratio

1.3

1.1

Total debt/Equity ratio

2.79

0.77

Total liabilities/ Total assets

87.73%

73.21%

Gross Profit Margin = (Sales - Cost of Goods Sold)/Sales

Return on Equity = Net Income/ Shareholder Equity

Current Ratio = Current Assets/Current Liabilities

Debt-to-Equity Ratio = Total Debt/Total Equity

Debt Ratio = Total Debt/Total Assets

Reference no: EM131016973

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