In a relatively small company that sells thin, electronic keypads and switches, the rules for selling products are such that sales representatives are assigned to unique regions of the country. Sales come either from cold calling, referrals, or current customers with new orders. A sizable portion of their business comes from referrals from larger competitors who send their excess and/or “difficult” projects to this company.  The company tracks these referrals and, similarly, returns the favors to these competitors by sending business their way.  The sales reps receive a 10 percent commission on actual purchases, not on orders, in their region.  They can collaborate on a sale with reps in other regions and share the commissions, with 8 percent going to the “home” rep and 2 percent going to the “visiting” rep. For any sales beyond the rep’s previously stated and approved individual annual sales goals, he or she receives an additional 5 percent commission, and additional end of the year bonus determined by management, and a special vacation for his or her family. Customers receive a 10 percent discount for any purchases over $100,000 per year, which are factored into the rep’s commissions. In addition, the company focuses on customer satisfaction with the product and service, so there is an annual survey of customers in which they rate the sales rep. These ratings are factored into the bonuses such that a high rating increases the bonus amount, a moderate rating does nothing, and a low rating can lower the bonus amount. The company also wants to ensure that the reps close all sales.  Any differences between the amount of orders and actual purchases are also factored into the rep’s bonus amount. As best you can, present the logic of the business process first using Structured English, and then using a decision table.  Write down any assumptions you have to make. Which technique is most helpful for this problem? Why?

Project Two Business Report

Your submission must be a minimum of 1 1/2 to 2 page in length: single spaced; 12 pt. font. One Inch margins. In your own words. A submission of 2 pages or more will increase your probability of earning an A.  If you create any small charts they will count for page space. Goal: tell the story of Hewlett Packard (HPE) in the parameters described below.

Each of the five projects requires you to map out your message, for your supervisor, illustrating your mastery of concepts from our course as they relate to your SEC 10-K Company Hewlett Packard (HPE). Consider this as your employer.  As a starting point, for project two:

Accounts Receivables and Inventory

Your SEC 10-K company should have accounts receivable and inventory.  For answers to the questions below, read the Notes to the Financial Statements presented immediately after the financial statements. This is usually part of section 8 of the SEC 10-K.  Section 7 is Management and Analysis (M&A). Section 15 is often referenced as financial exhibits.

I.  Write down the Accounts Receivables values over the last two years. How have the values changed? Do you believe this change is significant?  Why or why not? Are you surprised at these results? What information did you find about Accounts Receivables in the Notes to the Financial Statements section? Do not merely cut and paste from the SEC 10 K report.  Summarize the information using your own words as much as possible. 

II.   Write down the Inventory values over the last two years. How have the values changed? Do you believe this change is significant?  Why or why not? Are you surprised at these results? Who owes money to your Sec 10K HPE? IS this information available to you? What information did you find about Inventory in the Notes to the Financial Statements section?  How is it described?  Do the notes tell you what Inventory method is being used such as FIFO, LIFO, etc. Do not merely cut and paste from the SEC 10 K report.  Summarize the information you find in the Notes section using your own words as much as possible.

III.   Using the resources compute the following for two years:

(a)    Accounts Receivable Turnover

The formula: Net Credit Sales. If Net Credit Sales information is not available, use Sales for purposes of this assignment.

Average Accounts Receivables

        Formula for computing Average Accounts Receivables: Beginning AR + Ending AR/2

        Comment briefly interpreting your results.

(b)    Day’s sales in Accounts Receivable (AR)

The formula:  Sales / 365 = Sales Per dayDivide Accounts Receivable ending balance by sales per day. The answer: day’s sales in AR.

              Comment briefly interpreting your results. 

( c )   Inventory Turnover

         Formula: Cost of Goods Sold/Average Inventory

         Formula for computing Average Inventory: Beginning Inventory + Ending Inventory/2

          Comment briefly interpreting your results. 

(d)       Day’s sales in Inventory for two years. 

           For Inventory, Cost of Goods Sold / 365 = sales per day (at our cost).            Divide Inventory ending balance by sales per day. This answer:  day’s sales in Inventory

            Comment briefly interpreting your results. 

IV.   Property, Plant & Equipment

       Write down the Property, Plant & Equipment values over the last two years. How have  

        the values changed? Do you believe this change is significant?  Why or why not? Are     

        you surprised at these results? What information did you find about this category in

       the Notes to the Financial Statements section? What information was provided about

        the depreciation method(s) being used.  Do not merely cut and paste from the 

       SEC 10 K report.  Summarize the information using your own words as much as possible.

Your submission must cross reference the question numbers.  Failure to follow these instructions will result in loss of points.

Good Luck! Analyzing the SEC Annual Report is an important skill!