Question 2: The Method of Comparables: Dell, Inc. Here are some accounting numbers and market values (in millions) for Hewlett-Packard and Lenovo Group for 2008. These two computer manufacturers are considered to be comparables for Dell, Inc. Sales Earnings Book Value Market Value Hewlett-Packard Co. $84,229 $7,264 $38,526 $115,700 Lenovo Group Ltd. 14,590 161 1,134 6,381 a. Calculate price-to-sales, price-earnings (P/E), and price-to-book (P/B) ratios for Hewlett-Packard and Lenovo. b. Dell reported the following numbers for fiscal year 2008: $61,133 million $ 2,947 million Book value $ 3,735 million Sales Earnings Apply multiples for Hewlett-Packard and Lenovo to price Dell's 2,060 million out- standing shares. What difficulties did you encounter?

Question 2: The Method of Comparables: Dell, Inc. Here are some accounting numbers and market values (in millions) for Hewlett-Packard and Lenovo Group for 2008. These two computer manufacturers are considered to be comparables for Dell, Inc. Sales Earnings Book Value Market Value Hewlett-Packard Co. $84,229 $7,264 $38,526 $115,700 Lenovo Group Ltd. 14,590 161 1,134 6,381 a. Calculate price-to-sales, price-earnings (P/E), and price-to-book (P/B) ratios for Hewlett-Packard and Lenovo. b. Dell reported the following numbers for fiscal year 2008: $61,133 million $ 2,947 million Book value $ 3,735 million Sales Earnings Apply multiples for Hewlett-Packard and Lenovo to price Dell's 2,060 million out- standing shares. What difficulties did you encounter?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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