Accounting is a subject that has become integral to our daily life. From homemakers to people in business, and politicians to entertainers, everyone must have a basic understanding of the subject(“Dell Technologies Inc. (DVMT) Earnings Per Share”). It is a compulsory subject because accounting helps a person analyze his or her financial position. Businesses use accounting to understand whether they have earned a profit or loss. The information helps them decide for the future. This paper discusses the financial position of one company and compares it with its competitors.
Financial accounting is a tool for businesses to calculate their revenue through sales. The income determines many things. It determines whether the target market prefers the company’s products, whether the products and company have any future in the market, and whether investors should invest in the company. All three factors are vital for the owners of the business. If they want the business to run in the foreseeable future, they must ensure their sales are more than their costs to make a healthy profit.
The business I have chosen to analyze is Hewlett Packard Enterprises (HPE). Hewlett Packard Enterprises is a multinational company in the information technology industry. Its headquarters are in Palo Alto, Silicon Valley, California, United States. Hewlett Packard was founded in a one-car garage, by two friends. Among the products the company built initially, its first product was the precision audio oscillator(FY17 Q2 Financial Results Press Release | Dell). The company was formerly known as Hewlett Packard, however, in 2014 the company decided to split the personal computer and printers business from the rest of the business. The move resulted in the creation of HP Inc. and HPE. From its humble start years ago, Hewlett-Packard has come a long way. Today, HPE is worth billions of dollars. It shows that the business has a huge demand and the company’s brand is one of the most sought-after brands.
In an attempt to analyze the company’s financial status, I have compared it with three other companies. These three companies are HPE’s competitors: Dell Technologies, International Business Machines Corporation, and Apple Inc. Below is a table showing all four companies’ performance. The table shows the sales performance of all four companies and the annual expected sales growth rate. It also shows the Net Income and the anticipated Earnings per Share.
| ORIGINAL COMPANY | COMPETITORS | |||
| COMPANY | Hewlett Packard | Dell Tech. | Int. Business Machines Corp. | Apple Inc. |
| TICKER SYMBOL | HPE | DVMT | IBM | AAPL |
| REVENUE | $ 28.87 billion | $ 73.44 billion | $ 78.37 billion | $ 229.23 billion |
| 1-YR SALES GROWTH | 10.20% | 7.60% | 0.90% | 5.90% |
| 5-YR SALES GROWTH | 7.77% | 24% | 2.34% | 10.70% |
| Net Income Avi to Common(ttm): | $ 436 million | $-5.29 billion | $11.32 billion | $ 48.35 billion |
| 1-Yr EPS Growth | 1.18% | 5.66% | 13.80% | 11.44% |
| 3-Yr EPS Growth | 1.30% | 5.55% | 13.93% | 12.11% |
Comparing Hewlett Packard Enterprises with Dell Technologies, Dell is leading in sales. The margin between the two companies is quite significant. Another thing is the annual growth rate, for which an expected value is given. Dell’s annual sales growth is also greater than that of HPE. Apparently, HPE lags behind when it comes to sales. Dell seems to have a better position. Additionally, HPE is back in earnings per share growth. It forecasts figures showing that Dell is expected to earn more than HPE might receive from its investors.
We get a similar result comparing HPE to International Business Machines Corp. (IBM). Again, HPE lags behind in sales. However, according to the data, HPE might earn good revenue shortly. Consumers prefer him to IBM. However, it seems that IBM might get better Earnings per Share for its investors. It appears that while IBM might not be selling as well as HPE, its brand can provide its investors with a profit for the foreseeable future.
The last company to be compared is Apple Inc., a market leader Apple is expected to earn far more than its competitors. The data in the table above justifies this claim. Apple’s sales are now more than that of HPE and the remaining competitors. Though it is expected to grow in sales gradually, its current revenue still makes it a market leader. Apple’s Earnings per Share also make it a lucrative stock to invest in. Though expensive, it has the potential to make its investors rich.
Hewlett Packard Enterprises might be a brand name among consumers, but it cannot capture the market compared to its competitors. It is merely ready to take over a significant chunk of the market. It needs to make substantial changes in its marketing and sales sector to be able to sell more of its products. If Hewlett Packard Enterprises wants to gain the attention of more investors, it will have to do something about its Earnings per Share only when the EPS increases will more investors invest in the company.
Work Cited
“Dell Technologies Inc. (DVMT) Earnings Per Share.” NASDAQ.Com, http://www.nasdaq.com/symbol/dvmt/eps-forecast. Accessed 7 Dec. 2017.
FY17 Q2 Financial Results Press Release | Dell. http://www.dell.com/learn/us/en/uscorp1/secure/2016-09-06-fy17-q2-financial-results-press-release. Accessed 7 Dec. 2017.
