Introduction
The way companies do business is crucial. The United States Security and Exchange Commission (SEC) has developed policies regarding publically-traded firms. Hence an investor and/or a creditor can access the data they require in order to evaluate the risks to an organization concerning investing or extending credits (Hewlett-Packard 2011 Annual Report, 2011). This paper examines the Hewlett Packard ethics practice, the United States SEC compliance, monetary ratios as described in the company’s 2010 and 2011 annual statements, and filing through the United States SEC.
Role of ethics and compliance
According to Catherine Lesjak, a chief monetary officer of Hewlett Packard, the firm desires to be a leader in ethical management in order that an employee can be conceited in working for the company, and clients and other stakeholders that continue to support their business (Hewlett- Packard, n.d.). The company deems it necessary to focus on and understand the monetary elements of their investment. For Hewlett Packard to succeed, it must follow the right way to gain monetary success and aim at appropriate business ethics. The company must adhere to international, national, and domestic rules, guidelines, and decrees in order to best meet the needs of the business, workers, and clients (Hewlett-Packard 2011 Annual Report, 2011).
The current ratio of a firm is computed by differentiating the current assets with current liabilities (Hewlett- Packard Company, n.d.). This ratio aids in determining the comparative liquidity of the organization. To determine the liquidity of Hewlett-Packard, the monetary data for 2011 and 2011 was analyzed. HP had current assets amounting to $ 51,021 million, and current liabilities amounted to $ 50,442 million, which gives a current ratio of 1.01 for 2011. The current assets and current liabilities for 2010 were $ 54,184 million and $ 49,403 million, respectively, giving a current ratio of 1.10. This indicates that in every 1.01 dollars in assets, there was 1 dollar in debt for 2011.
The debt ratio of an organization is calculated by dividing the cumulative debt with cumulative assets. In 2011 the debit for Hewlett-Packard amounted to $129,517 million and had assets amounting to $129,517 million, leading to a debt ratio of 17.41 percent. Total debt in 2010 amounted to $ 15,258 million, and total assets amounted to $124,503, resulting in a debt ratio of 12.26% (Hewlett-Packard 2011 Annual Report, 2011, p. 76). Such a low debt ratio value is in line with the industry value since a software company essentially has limited access to assets that may be secured for a loan, therefore implying more utilization of debts (e.g., land and building). Often these companies have technology and R&D as the only assets.
Return on investment (ROI) is generated by dividing funds gained and/or lost with money invested. ROI, in addition, utilized the competence of diverse investments so as to enable informed decision-making. Another role of ethics and compliance is that prior to buying stock, stakeholders must define whether they will get positive returns after investing (Hewlett-Packard 2011 Annual Report, 2011). HP’s Policy on Business Performance represents the basic regulations that ensure the lawful and/or ethical responsibilities of HP. These regulations concern both conducts within the Hewlett Packard and conduct entailing clients, value chain stakeholders, business rivals, and suppliers. A few of the ethical practices confirmed by HP include: streamlining and/or augmenting the supplier chain according to Michael Porter, consolidating real estate rates, analyzing of entire sections in order to increase output and lower cost, and realigning the employees. Hewlett-Packard is intending to establish a competitive edge by upgrading both intrinsic and extrinsic logistics (Hewlett- Packard Company, n.d.).
References
Hewlett- Packard Company (n.d.). Driving Data Center Transformation. Web.
Hewlett-Packard Annual Report. (2011). Web.