Vertical analysis of income statement
The following income statement data (in millions) for Dell, Inc., and Hewlett-Packard Company (HP) were taken from their recent annual reports:
|
Dell |
Hewlett-Packard |
|
|
Net sales |
$61,494 |
$126,033 |
|
Cost of goods sold (expense) |
(50,098) |
(96,089) |
|
Operating expenses |
(7,963) |
(18,465) |
|
Operating income (loss) |
$ 3,433 |
$ 11,479 |
1. Prepare a vertical analysis of the income statement for Dell. Round to one decimal place.
2. Prepare a vertical analysis of the income statement for HP. Round to one decimal place.
3. Based on (a) and (b), how does Dell compare to HP?