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Review the 2007 balance sheet data for Hewlett-Packard (HP) and Dell shown below. 1. Compute each companys current ratio for

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Review the 2007 balance sheet data for Hewlett-Packard (HP) and Dell shown below.

Review the 2007 balance sheet data for Hewlett-Packard (HP) and

1. Compute each company€™s current ratio for 2007. Based on the result, which company appears to be more liquid?
2. Compute each company€™s debt-to-equity ratio for 2007. Which company appears to have the most debt in relation to stockholders€™ equity?
3. Which company has a larger amount of long-term debt in its financing mix?
4. Why would HP have a larger amount in retained earnings at the end of 2007 relative to Dell?
5. How can Dell have $18,199 million in retained earnings and only $3,735 million of total stockholders€™equity?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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(in millions) Hewlett-Packard Dell Current assets.. Current liabilities Total liabilities Total stockholders' equity Retained earnings $47.402 39.260 50.173 38,526 21,560 $19,880 18,526 23,732 3,735 18,199

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1 Hewlett Packards current ratio in 2007 is 1 21 Dells current ratio in 2007 is 1 07 Thus HP appears …View the full answer


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Intermediate Accounting

Intermediate Accounting

ISBN: 978-0324592375

17th Edition

Authors: James D. Stice, Earl K. Stice, Fred Skousen

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Question Details
Chapter # 12
Section: Practice Exercises
Problem: 72
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Question Posted: January 28, 2012 05:40:54
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