Next we discuss counterparty our next company HPQ is facing. The company’s 10K indicated, instruments that make HPQ vulnerable to credit risk. The instruments include are cash, investments, receivables from trade customers and contract manufacturers and derivatives which HPQ maintains with various financial institutions. The organization’s financial institutions are located in various geographic regions, and HPQ’s policy is designed to limit exposure from any particular institution. The company’s 10K shows that, due to technology availability, price or, quality considerations HPQ sources a huge number of its parts from single source suppliers. Using a single source supplier mean that there could be multiple challenges which adversely affect HPQ’s net revenue and gross margins include. The challenges include: a) the loss of a single-source-supplier, b) deterioration of the organization’s relationship with the supplier, or c) unilateral modification to the contractual terms. Further HPQ sells a significant portion of its products through third-party distributors and resellers and, as a result, the company maintains individually significant receivable balances with these parties. Now we review the measures HPQ has put in place to offset its counterparty risks. The company’s 10K shows that HPQ performs periodic evaluations of its credit standing with financial institutions. The company also utilizes derivative contracts to protect against interest rate exposures. HPQ’s ten largest distributor and reseller receivable balances, which were concentrated primarily in North America and Europe, collectively represented approximately thirty-four percent of gross accounts receivable as of October, 2016. The 10K report also confirms that none of HPQ’s customer accounts totals more than ten percent of gross accounts receivable. The enterprise performs ongoing credit evaluations of its financial condition of its third-party distributors and resellers. In certain situations HPQ may require collateral, such as letters of credit and bank guarantees from its vendors. The company’s credit risk associated with receivables is mitigated, by the amount HPQ owes to its outsourced manufacturers, since the organization has the legal right to offset its payables to the outsourced manufacturers against these receivables.