Computers FOR NEEL ONLY!!!!

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 2 of the following websites and make a selection.HP http://www.hp.com/#ProductAcer http://www.acer.com/worldwide/selection.htmlApple http://www.apple.com/Once you have made your selection, please complete the following items and questions:Compare the following items for your selections:PriceDelivery ChargesFinancing OptionsDiscountsCouponsWarrantiesInstallation OfferedRecycling of Old Components OfferedWhat are some factors that can impact the gross profit of a merchandise company?One item that can help investors measure how effectively a business is using its assets to generate sales is the ratio of net sales to assets. The calculation explanation for this financial ratio is found on page 275 of the textbook. Use the following links to find the financial information needed to calculate the net sales to assets measures 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. a. HPhttp://h30261.www3.hp.com/phoenix.zhtml?c=71087&p=irol- reportsannualb. ACERhttp://www.acer- group.com/public/Investor_Relations/index.htmc. Applehttp://investor.apple.com/sec.cfm?SortOrder=Size%20Descending&DocType=&DocTypeExclude=&Year=&FormatFilter=&CIK 

Financial Analysis and Interpretation

The ratio of net sales to assets measures how effectively

a business is using its assets to generate sales. A high ratio

indicates an effective use of assets. The assets used

in computing the ratio may be the total assets at the end

of the year, the average of the total assets at the beginning

and end of the year, or the average of the monthly

assets. For our purposes, we will use the average of the

total assets at the beginning and end of the year. The ratio

is computed

as follows:

To illustrate the use of this ratio, the following data

(in millions) are taken from annual reports of Sears

Holding Corporation and JCPenney:

Sears JCPenney

Total revenues (net sales) $50,703 $19,903

Total assets:

Beginning of year 27,397 12,673

End of year 30,066 12,461

Ratio of

Net Sales

to Assets =

Net Sales

Average Total Assets

The ratio of net sales to assets for each company is

as follows:
Sears JCPenney

Ratio of net sales to assets 1.76* 1.58**

*$50,703/[($27,397 _ $30,066)/2]

**$19,903/[($12,673 _ $12,461)/2]

Based on these ratios, Sears appears better than

JCPenney in utilizing its assets to generate sales.

Comparing this ratio over time for both Sears and

JCPenney, as well as comparing it with industry averages,

would provide a better basis for interpreting the financial

performance of each company.

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