Introduction:
Segment Reporting:
The reporting policy of the company based on the business or operating segment or geographical coverage of the business is called segment reporting.
Business segment provides information related to individual products and services or group of products and services that are different from other business segments. Geographical segment provides information related to products or services within a particular economic environment that are different from other geographical area.
Segment reporting helps in better understanding of the company, better assessment of risks and returns and enables good comparability that helps in taking appropriate decisions by the management.
Requirement-1:
To identify:
The seven business segments operated by HP from its annual report for the fiscal year ended 2015.
Requirement-2a:
To identify:
The operating segment of HP that had the largest dollar amount of operating income during the fiscal year 2015.
Requirement-2b:
To identify:
The operating segment of HP that had the largest amount of assets during the fiscal year 2015.
Requirement-3a:
To compute:
The return on assets for each business segments for the fiscal year 2015 using the operating income and segment total assets.
Requirement-3b:
To discuss:
The highest return on assets of HP for the fiscal year ended 2015 to measure the profitability of the segment in relation to its total assets.
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Chapter 7 Solutions
Loose Leaf for Fundamental Accounting Principles
- Complete the table given below and compute the WACC from theinformation provided after the table template. capital component market value weight cost of capital weight x cost of capital debt common stock preferred shares The following balance sheet extract relates to the Spread-Out AirlinesLtd.Bonds Payable $1,000,000Preferred Stock $2,000,000Common Stock $3,000,000 Additional Information:1. The bonds are 8%, annual coupon bonds, with 9 years tomaturity and are currently selling for 90% of par.2. The company’s common shares which have a book value of $25per share are currently selling at $20 per share.3. The preferred shares are 5% preferred shares with a bookvalue of $100 per share. These shares are currentlyselling at $80 per share.4. The company has an equity beta of 1.35 and the current Treasury bill rate is 3.0%. The market risk premium is1.5%5. The company’s tax rate is 30%.arrow_forwardCalculate the net sales for this financial accounting questionarrow_forwardQuick answer of this accounting questionsarrow_forward
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