Computers have become a staple in the lives of most people. There are many companies that provide computers on the market. Assume that you are planning to purchase a new laptop for your classes, work and home use. Please go to the websites of two major United States computer manufacturers such as Hewlett Packard®, Acer®, Apple®, etc. and make a selection.
Once you have made your selection, please complete the following items and questions:
Compare the following items for your selections:
Price
Delivery Charges
Financing Options
Discounts
Coupons
Warranties
Installation Offered
Recycling of Old Components Offered
What are some factors that can impact the gross profit of a merchandise company?
One item that can help investors understand the relationship between net sales and net profits is the gross profit rate. The calculation explanation for this financial ratio is found on page 5-18 of the textbook. Find the financial information needed to calculate the gross profit rate for your two selected companies.
Which company has the better ratio?
Why do you think this is the case?
Please use the most recent annual report available. Also, make sure to use the same year’s annual report for your companies.
- Compare the following items for your selections:
1a. Price:
1b. Delivery charges:
1c. Financing options:
1d. Discounts:
1e. Coupons:
1f. Warranties:
1g. Installation offered:
1h. Recycling of Old Components Offered:
- What are some factors that can impact the gross profit of a merchandise company?
2a. Factor 1:
2b. Factor 2:
- The calculation explanation for this financial ratio is found on page 223 of the textbook. Find the financial information needed to calculate the gross profit rate for your two selected companies.
3a. Gross Profit Rate, Company 1:
3b. Gross Profit Rate, Company 2:
3c. Which company has the better ratio?
3d. Why do you think this is the case?
Remember that you need to write 100 words in total, not for each of the three questions, so don’t write a whole paper! 😀
Have a great week!! J
Hints for Finding the 2 Numbers You Need to Calculate the Gross Profit Rate
I’m going to attach the financial statements for our three computer manufacturers to this post. If I forget, just reply to the post and let me know. J
Hint 1: Hewlett-Packard, aka HP, refers to its income statement as “Consolidated Statements of Earnings” on page 57 of the 2020 Combined Annual Report (page F-57 or 159 of the pdf). Instead of Sales, it lists Revenues. Instead of Net Sales, it lists Net Revenues. Use Net Revenues. HP no longer calculates Gross Profit for you, so you have to calculate Gross Profit yourself. Gross Profit is Net Sales – Cost of Goods Sold. HP calls its Cost of Good Sold by the name of Cost of Revenue. So for HP, Net Revenues – Cost of Revenues = Gross Profit.
Hint 2: Acer refers to its income statement as “Condensed Statement of Comprehensive Income” on page 105 of the 2019 Annual Report (page 58 of the pdf). Instead of Net Sales, it lists Revenue. Use Revenue.