Compaq , case study finanial analysis

Compaq A.         Based on the spreadsheet ratios, evaluate whether the conjunction is strong or weak in the four areas. conceptive/Weak? causality (standards indicated)          liquid Strong (Current Ratio = 1.5 ) Liquidity was decreased from 2.3 in 1997 to 1.4 in 1998 below the application fair but its lifelessness rattling near the sedulousness average and this declined was due to several(prenominal) factors; the primary(prenominal) factor that in 1998 the Compaq completed its acquisition of digital equipment arc window which mean it will carry due to this optical fusion its assets and its liabilities. As a resolvent the accepted liabilities amplificationd by 106% in 1998 in comparing to the veritable assets which increased by 26% due to the major increase in different current liabilities and to the accrued expenses due to restructuring acquired companies and to the increase in explanation receivables by 142% and the other current assets by 161% in 1998. however, the increase in current liabilities > increase in current assets thats why the current ratio decreased this dramatically decrease.         Leverage Strong (Total Debt to impartiality = 1- 2 ) Leverage is change magnitude and it was within fabrication average in 1998. It reached 1.52 in year 98 in compare to 0.59 in 1997.

Overall, due to the merger with DEC the company has carried the long-term liability for postretirement benefits in 1998-amounted SR967. In addition, and as a result of the merger the shareholders equity has incre ased by 20%.         turnover ! Strong (Net operational Cycle = 60-90) Gross Operating wheel for year 99 is 112 old age (within the industry average 90- 150) in compare to 75 in 1997, and it was increasing due to the days inventory has improved to 31 in 1998 better than the industry which mean its well behaved. Days account payable is longer the industry which is good but the Days... If you want to go a full essay, place it on our website: OrderCustomPaper.com

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