Posted: June 15th, 2022

Accounting homework help

Accounting homework help

basically, its a group project about HPcompany, please look at the assignment I attach below to finish these requirement, and write 3 pages. I also will attach the instructions and group paper for you to look so that you can gather information to write it well. please provide references.

Based on the background research and analytical procedures performed in Stages a-c, summarize your observations about the company’s business, including your assessment of the client’s business risk. Prepare a broad audit plan:

· Which transaction cycles are the high-risk areas?

· Identify at least three risk areas in the audit of this company and describe: (1) the risk; (2) why you have assessed this as a specific risk; and (3) how you would perform the audit to address this risk.

· If management faced tremendous pressure regarding the entity’s financial performance, what opportunities might exist for them to engage in fraudulent financial reporting?

Above is what you need to write the group paper about. Only three pages by analyzing my teammates’ parts to answer those questions!!!!!!

Below is my teammate’s part:

SECTION 1 (a-c)

The company HP, short for Hewlett-Packard, is a company that sells hardware, software, and other services pertaining to technology. HP is a multinational information technology (IT) company. This company has adopted the values called the HP Way, which are “designed to foster innovation, respect for individuals and value for customers.”

HP being a leading company in technology offers, HP products includes PCs, computing devices, enterprises and industry standard servers, storage devices, networking products, software, printers, scanners, plotters and other imaging products. The company introduced handheld calculators, the first commercially distributed data processing system, Laser Jet printers, and (jointly with Intel) the Eplicitly Parallel Instruction Computing (EPIC) architecture.

HP’s customers based on the variety of hardware components as well as software and related services to consumers, are small- and medium-sized businesses (SMBs) and large enterprises, including customers in the government, health and education sectors.

Section 2 (a-c)

The key characteristics in the consumer electronics business is the drive for innovation, competitiveness, and creativity. The tech industry is very fast paced, and companies need to keep up with the newest devices, and demand. HP offers a diverse product offering, and has the largest market share in printers (Swot analysis of HP). In 2015, after HP split into HPQ and HPE to cut costs, it flowed into the “shake out” phase of the life cycle by the end up 2016. During 2017/2018 sales seemed to climb back up slightly putting them in the “reinvention” phase under “maturity” in the life cycle. HP has managed to extend its life cycle with increasing sales, and income.

There are many important factors for success in this business industry. An important one to highlight is offering a product or service that is simple enough to understand for those that aren’t expert computer users (10 tips for). Customers need to be able to purchase your product, and understand how to use and access it with very minimal trouble. In order to stand out from competitors, you must be visible to the customers. “Be accessible on social media, write a blog or articles for industry publications, and participate in conference panels and speaking engagements” (The 7 Critical). Market your product so that people from all over the nation know it exists. Having outstanding customer service will attract customers, and help keep them loyal as well. The customer experience is just as important as the product/service being offered. People tend to be very loyal to brands, so give them a reason to stick around. HP’s competitor, Apple does a better job at excelling in this area but “HP ranks 50th amongst the top 100 brands around the world.” (SWOT analysis). One of the toughest key factors to keep up with is being able to continually provide up to date products/services. This innovation and creativity is essential to all companies in the computer industry. “ HP Labs research is focused on key growth areas that include advancing technologies like sensing, natural language detection, audio/video analytics, and new information displays” (SWOT analysis). You must be able to grow along with the rest of the world and its changing technology.

As with all companies and businesses HP has its own regulations and legal matters of concern. HP states, “Section 255 of the Telecommunications Act requires telecommunications products and services to be accessible to people with disabilities. FCC rules cover all hardware and software telephone network equipment and telecommunications equipment used in the home or office. Such equipment includes telephones, wireless handsets, fax machines, answering machines and pagers. FCC rules also cover basic and special telecommunications services, including regular telephone calls, call waiting, speed dialing, call forwarding, computer-provided directory assistance, call monitoring, caller identification, call tracing and repeat dialing, as well as voice mail and interactive voice response systems that provide callers with menus of choices.The CVAA updates federal communications law to increase the access of persons with disabilities to modern communications, updating accessibility laws enacted in the 1980s and 1990s to include new digital, broadband, and mobile innovations. Regulations are enforced by the FCC and documented as 47 CFR Part 14 and Part 79.” (accessibility legislation). HP has its own social and environmental responsibility report on its website, publicly displayed. In this report you may find details about HP’s dedication to its workplace and community, conserving our environment,helping to create a sustainable future. HP holds the values of its employees and community just as important as the products and services it offers. The company promotes a diverse workforce, and has an open door policy that is encouraged, especially in cases of harassment of any kind. “Our goal is to provide innovative information-technology solutions to foster growth in technologically underserved communities in ways that are economically, environmentally, and culturally sustainable” (HP). HP is continuously working towards a healthier environment, but still has a long ways to go. “Our environmental goals are to provide products and services that are environmentally sound throughout their life-cycles and to conduct our operations worldwide in an environmentally responsible manner. To achieve these goals, the company has established the following Environmental Policy. All HP managers and employees are expected to support implementation of this policy in accordance with their roles and responsibilities in the organization. ” (HP). The company recognizes that there will always be something to work towards and achieve, especially with the sustainability of our environment. HP has been working towards better innovations to help others worldwide as well. “The Joko Project, named for the Wolof word for “link,” was born of a partnership among HP, a local telecommunications provider, and world-renowned musician Youssou N’Dour. This effort will connect Senegal with the world by providing affordable Internet access across the country and in expatriate communities worldwide.” (HP). It is the many projects and partnerships like this that help make a difference for the lives of millions worldwide.

Section3

Part 3

Account Balance

2015

2016

2017

% change 2015-2016

% change 2016-2017

Net Sales

51,463

48,238

52,056

-6.69

7.33

Cost of Sales

41,524

39,240

42,478

-5.82

7.62

Operating Expenses

4,719

3,833

4,376

-23.12

12.41

Operating Income

3,920

3,549

3,519

-10.45

-0.85

Net Account Receivables

8,639

7,382

7,895

-17.03

6.50

Inventories

4,288

4,484

8,786

4.37

48.96

Accounts Payable

10,194

11,103

13,279

8.19

16.39

Long-Term Debt

6,677

6,735

6,747

0.86

0.18

Net sales do not account for the cost of goods sold, or operating expenses. Analysts review this amount on the income statement when assessing the health of a company.

Cost of Sales is the direct costs of the production of the goods sold in a company. This amount includes the cost of the materials used in creating the good along with the direct labor costs used to produce the good but excludes operating expenses.

An operating expense is the expenses a business incurs through its normal business operations which include rent, equipment, marketing, payroll, insurance, etc. One of the responsibilities that management must contend with is determining how to reduce operating expenses without significantly affecting a firm’s ability to compete with its competitors.

Operating income measures the amount of profit realized from a business’s operations, after deducting operating expenses and cost of goods sold (COGS).

Net receivables is the total money owed to a company by its customers minus the money owed that will likely never be paid.

Inventory is the term for the goods available for sale and raw materials used to produce goods available for sale. Inventory represents one of the most important assets of a business because the turnover of inventory represents one of the primary sources of revenue generation and subsequent earnings for the company’s shareholders.

Accounts payable (AP) represents a company’s obligation to pay off a short-term debt to its creditors or suppliers.

Long-term debt consists of loans and financial obligations lasting over one year. Long-term debt for a company would include any financing or leasing obligations that are to come due after a 12-month period.

The comparative income statement above shows there was an increase in the net sales of 7.33% over the reported period to $52,056. The cost of goods and services totaled $42,478 in 2017, 7.62% more than in 2016. The operating expenses increased by 12.41% totaling $4,376 but the operating income decreased by 0.85% to $3,519. The inventories increased by 48.96% to $8,786. The net accounts receivable, accounts payable and long-term debt all increased by 6.5% ($7,895), 16.39% ($13,279) and 0.18% (6,747), respectively. Earnings Before Interest and Taxes was positive at $3,276 in 2017 but decreased by 14.8% during 2016-2017. On the whole, 2017 was a good period as the company recorded $2,526 million net earnings from continuing operations

Activity

2015

2016

2017

Account Receivable Turnover

5.54

11.02

12.51

Number of Days Sales in Account Receivable

35

30

29

Inventory Turnover

7.76

8.95

6.40

Number of Days Sales in Inventory

39

39

46

Liquidity

2015

2016

2017

Current Ratio

1.23

0.98

1.00

Quick (acid Test)

1.13

0.74

0.74

Cash Ratio

0.61

0.56

0.49

Long-Term Debt Obligations

2015

2016

2017

Times Interest Earned

6.64

11.83

10.17

Debt Ratio

73.7%

113.4%

11.0%

Debt to Equity

0.24

-1.73

-1.98

Profitability

2015

2016

2017

Gross Margin

21.5%

18.7%

18.4%

Operating Margin

6.21%

7.36%

6.76%

Return on Assets

4.38%

9.31%

8.30%

Return on Equity

16.61%

-57.02%

-63.04%

The 2017 accounts receivable turnover of 12.51 indicates HPQ collected its average receivables 12.51 times that period. The higher the turnover is, the faster the collection process. As a result, the average collection period dropped from 30 days to 29 days. This means that it took an average of 29 days to collect a receivable in 2017.

HPQ’s inventory was less active in 2017 than in 2016. The company was holding the inventory almost a 2.54 times or 7 days longer in 2017 than in 2016. This means that it took an average of 46 days to sell inventory in 2017.

Current Ratio indicates of a firm’s ability to pay its current liabilities from its current assets. HPQ’s current ratio was 1.00 in 2017, meaning that HPQ had 1.00 times as many current assets as current liabilities. The current ratio was 0.98 at the end of 2016 and 1.23 at the end of 2015. A ratio under 1 indicates that the company’s debts that will need to be paid in a year or less are greater than its assets.

Quick Ratio (Acid Test Ratio) indicates a firm’s short-term liquidity measuring how well company can meet its short-term obligations with its highly liquid assets, such as cash and equivalents, marketable securities and receivables. The quick ratio for 2017 and 2016 was 0.74, showing there were $0.74 of the quick assets for every $1.00 of the current liabilities. The ratio for 2015 shows $1.13 of the quick assets were available for every $1.00 of the current liabilities.

Cash Ratio estimates the share of the company’s current liabilities that can be paid off immediately. A lower value indicate possible problems with covering company’s current liabilities immediately but higher value can speculate company’s inefficient asset structure. The cash ratio shows that the company was able to pay off 49% of its debt immediately as for the end of 2017 which is a 7% decrease from 2016 (0.56).

The times interest earned ratio indicates a firm’s long-term debt paying ability. Having normal times interest earned ratio means lesser risk for a firm not to meet its interest obligation. If this ratio is being relatively high and stable over the years, a company is financially sustainable, while relatively low and fluctuating ratio would mean potential problems with paying the long-term obligations. The times interest earned ratio of 10.17 shows HPQ had no difficulty generating enough cash flow to pay interest on its debt at the end of 2017. Company’s ability to pay interest on debt was better in 2016 (11.83) than in 2015 (6.64).

The debt ratio is an indicator of firm’s long-term debt-paying ability. It is a ratio of firm’s total liabilities to its total assets. It shows how well creditors are protected in case of company’s insolvency by indicating the percentage of firm’s assets financed by creditors. In terms of financial sustainability of a business lower ratios are more favorable. The debt ratio for HPQ tells us that in 2017 each $1.00 of the assets was financed by $0.11 of debt or 11%. In 2016 it was 113.4% of the assets were financed by debt and in 2015 it was 73.7%

Another ratio, Debt to Equity, helps analysts understand how well creditors are protected in case of firm’s insolvency. It’s a ratio that compares the total debt with the total shareholders’ equity. If a company’s debt to equity ratio is high, it has been financing its growth with debt. This is done to generate more earnings than it would have been without outside financing. In terms of long-term debt-paying ability the lower this ratio is the better. The debt/equity ratio for HPQ was -1.98 in 2017, -1.73 in 2016 and 0.24 in 2015.

The gross margin was positive in 2015-2017. At the end of 2017 per dollar of sales collected HPQ kept $0.18 as profit. In 2016, the gross margin was 0.187 (18.7%) and 0.215 (21.5%) in 2015.

The HPQ’s operating performance was good in 2017. For every dollar of the net sales the company earned $0.07 in operating income. In 2016, it earned $0.07 and in 2015 it earned $0.06.

For HPQ the return on assets shows that the company, in 2017, earned a profit of about 8.30 percent per dollar of the assets. In 2016 it earned 9.31% and in 2015 it earned 4.38%.

Return on Equity (ROE) looks at the firm’s bottom line to gauge overall profitability for the firm’s owners and investors. Stockholders are at the bottom of the pecking order of a firm’s capital structure, and the income returned to them is a useful measure that represents excess profits that remain after paying mandatory obligations and reinvesting in the business. HPQ’s ROE for 2017 was -63.04%, -57.02 in 2016 and 16.61% in 2015.

Industry Comparison

HP

IBM

Dell

Apple

Market Cap

35.97

109.08

80.29

856.41

Revenue

52.056

79.139

61.642

229.234

Employees

49,000

366,600

101,800

132,000

Revenue Growth

7.91%

0.98%

21.08%

6.30%

Gross Margin

18.40%

45.78%

21.02%

38.47%

Net Income

2.526

5.753

-1.672

48.351

EPS

1.48

6.14

-2.79

9.21

Different industry variables create the unique financial conditions, in which the company is currently working. This is why a comparison with the major competitors helps to get a precise estimation of the HPQ’s financial position and effectiveness.

Market capitalization refers to the total dollar market value of a company’s outstanding shares. Analysts use this figure to determine a company’s size, as opposed to using sales or total asset figures. HPQ is the smallest when compared with its competitors with a Market Cap of $35.97. Revenue is the amount of money that a company actually receives during a specific period, including discounts and deductions for returned merchandise. It is the top line or gross income figure from which costs are subtracted to determine net income. HPQ’s revenue is the lowest of its competitors at $52.056 billion. HPQ has the least amount of employees (49,000) of its competitors as well and its gross margin is also the smallest at 18.4%. HPQ’s Net income of $2.526 billion is less than IBM and Apple but it’s better than Dell. HPQ’s Earnings per share, like its Net Income, is less than IBM and Apple but greater than Dell.

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that’s it , please look it over, and provided me the 3 pages by following the instructions!!!