In 2011 Hewlett Packard announced it was going to purchase Autonomy for just over $10 billion. Currently they are considering an $8.8 billion write down claiming that Autonomy misrepresented its financial position.
Prepare a 5-10 page detailed analysis addressing the following issue APA style formatting. Please use a minimum of 3 sources.
1. Why did HP purchase Autonomy?
2. Were there any objectives to the purchases, if so what were they and how they were overcome?
3. Perform financial ratio analysis including:
Liquid ratios, profitability ratios, activity analysis ratios, capital structure analysis ratios, capital market analysis, and ROA for both companies before the purchase and after.
Here’s a helpful link
4. Compare and interpret these ratios to industry averages
5. Were any red flags or other clues that indicate potential misrepresentation by Autonomy?
6. What are the roles/responsibilities of the two auditing firms involved?
7. What type of litigation might arise and what would be the main argument of HP. What would be the best defense of Autonomy management?
Be sure to read the notes to the financial statements are well as any other analysis available. Research the purchase through HP’s investor site, Internet and filings with the SEC.