Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
HP Inc., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | HP Inc. inventory turnover ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | HP Inc. receivables turnover ratio improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | HP Inc. payables turnover ratio decreased from 2016 to 2017 but then slightly increased from 2017 to 2018. |
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | HP Inc. operating cycle deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | HP Inc. number of days of payables outstanding increased from 2016 to 2017 but then slightly decreased from 2017 to 2018. |
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | HP Inc. cash conversion cycle improved from 2016 to 2017 and from 2017 to 2018. |
Inventory Turnover
HP Inc., inventory turnover calculation, comparison to benchmarks
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cost of revenue | 47,803) | 42,478) | 39,240) | 78,596) | 84,839) | 86,380) | |
| Inventory | 6,062) | 5,786) | 4,484) | 6,485) | 6,415) | 6,046) | |
| Short-term Activity Ratio | |||||||
| Inventory turnover1 | 7.89 | 7.34 | 8.75 | 12.12 | 13.23 | 14.29 | |
| Benchmarks | |||||||
| Inventory Turnover, Competitors2 | |||||||
| Apple Inc. | 41.39 | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | 10.14 | — | — | — | — | — | |
| Super Micro Computer Inc. | 3.43 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31).
1 2018 Calculation
Inventory turnover = Cost of revenue ÷ Inventory
= 47,803 ÷ 6,062 = 7.89
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | HP Inc. inventory turnover ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |
Receivables Turnover
HP Inc., receivables turnover calculation, comparison to benchmarks
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net revenue | 58,472) | 52,056) | 48,238) | 103,355) | 111,454) | 112,298) | |
| Accounts receivable, net | 5,113) | 4,414) | 4,114) | 13,363) | 13,832) | 15,876) | |
| Short-term Activity Ratio | |||||||
| Receivables turnover1 | 11.44 | 11.79 | 11.73 | 7.73 | 8.06 | 7.07 | |
| Benchmarks | |||||||
| Receivables Turnover, Competitors2 | |||||||
| Apple Inc. | 11.45 | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | 8.88 | — | — | — | — | — | |
| Super Micro Computer Inc. | 7.44 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31).
1 2018 Calculation
Receivables turnover = Net revenue ÷ Accounts receivable, net
= 58,472 ÷ 5,113 = 11.44
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | HP Inc. receivables turnover ratio improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018. |
Payables Turnover
HP Inc., payables turnover calculation, comparison to benchmarks
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cost of revenue | 47,803) | 42,478) | 39,240) | 78,596) | 84,839) | 86,380) | |
| Accounts payable | 14,816) | 13,279) | 11,103) | 15,956) | 15,903) | 14,019) | |
| Short-term Activity Ratio | |||||||
| Payables turnover1 | 3.23 | 3.20 | 3.53 | 4.93 | 5.33 | 6.16 | |
| Benchmarks | |||||||
| Payables Turnover, Competitors2 | |||||||
| Apple Inc. | 2.93 | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | 9.83 | — | — | — | — | — | |
| Super Micro Computer Inc. | 5.56 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31).
1 2018 Calculation
Payables turnover = Cost of revenue ÷ Accounts payable
= 47,803 ÷ 14,816 = 3.23
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | HP Inc. payables turnover ratio decreased from 2016 to 2017 but then slightly increased from 2017 to 2018. |
Working Capital Turnover
HP Inc., working capital turnover calculation, comparison to benchmarks
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current assets | 21,387) | 22,318) | 18,468) | 51,787) | 50,145) | 50,364) | |
| Less: Current liabilities | 25,131) | 22,412) | 18,808) | 42,191) | 43,735) | 45,521) | |
| Working capital | (3,744) | (94) | (340) | 9,596) | 6,410) | 4,843) | |
| Net revenue | 58,472) | 52,056) | 48,238) | 103,355) | 111,454) | 112,298) | |
| Short-term Activity Ratio | |||||||
| Working capital turnover1 | — | — | — | 10.77 | 17.39 | 23.19 | |
| Benchmarks | |||||||
| Working Capital Turnover, Competitors2 | |||||||
| Apple Inc. | 18.35 | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | 1.42 | — | — | — | — | — | |
| Super Micro Computer Inc. | 4.67 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31).
1 2018 Calculation
Working capital turnover = Net revenue ÷ Working capital
= 58,472 ÷ -3,744 = —
2 Click competitor name to see calculations.
Average Inventory Processing Period
HP Inc., average inventory processing period calculation, comparison to benchmarks
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Inventory turnover | 7.89 | 7.34 | 8.75 | 12.12 | 13.23 | 14.29 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average inventory processing period1 | 46 | 50 | 42 | 30 | 28 | 26 | |
| Benchmarks (no. days) | |||||||
| Average Inventory Processing Period, Competitors2 | |||||||
| Apple Inc. | 9 | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | 36 | — | — | — | — | — | |
| Super Micro Computer Inc. | 106 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31).
1 2018 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 7.89 = 46
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. |
Average Receivable Collection Period
HP Inc., average receivable collection period calculation, comparison to benchmarks
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Receivables turnover | 11.44 | 11.79 | 11.73 | 7.73 | 8.06 | 7.07 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average receivable collection period1 | 32 | 31 | 31 | 47 | 45 | 52 | |
| Benchmarks (no. days) | |||||||
| Average Receivable Collection Period, Competitors2 | |||||||
| Apple Inc. | 32 | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | 41 | — | — | — | — | — | |
| Super Micro Computer Inc. | 49 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31).
1 2018 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 11.44 = 32
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. |
Operating Cycle
HP Inc., operating cycle calculation, comparison to benchmarks
No. days
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Average inventory processing period | 46 | 50 | 42 | 30 | 28 | 26 | |
| Average receivable collection period | 32 | 31 | 31 | 47 | 45 | 52 | |
| Short-term Activity Ratio | |||||||
| Operating cycle1 | 78 | 81 | 73 | 77 | 73 | 78 | |
| Benchmarks | |||||||
| Operating Cycle, Competitors2 | |||||||
| Apple Inc. | 41 | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | 77 | — | — | — | — | — | |
| Super Micro Computer Inc. | 155 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31).
1 2018 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 46 + 32 = 78
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | HP Inc. operating cycle deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |
Average Payables Payment Period
HP Inc., average payables payment period calculation, comparison to benchmarks
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Payables turnover | 3.23 | 3.20 | 3.53 | 4.93 | 5.33 | 6.16 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average payables payment period1 | 113 | 114 | 103 | 74 | 68 | 59 | |
| Benchmarks (no. days) | |||||||
| Average Payables Payment Period, Competitors2 | |||||||
| Apple Inc. | 125 | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | 37 | — | — | — | — | — | |
| Super Micro Computer Inc. | 66 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31).
1 2018 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 3.23 = 113
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | HP Inc. number of days of payables outstanding increased from 2016 to 2017 but then slightly decreased from 2017 to 2018. |
Cash Conversion Cycle
HP Inc., cash conversion cycle calculation, comparison to benchmarks
No. days
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Average inventory processing period | 46 | 50 | 42 | 30 | 28 | 26 | |
| Average receivable collection period | 32 | 31 | 31 | 47 | 45 | 52 | |
| Average payables payment period | 113 | 114 | 103 | 74 | 68 | 59 | |
| Short-term Activity Ratio | |||||||
| Cash conversion cycle1 | -35 | -33 | -30 | 3 | 5 | 19 | |
| Benchmarks | |||||||
| Cash Conversion Cycle, Competitors2 | |||||||
| Apple Inc. | -84 | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | 40 | — | — | — | — | — | |
| Super Micro Computer Inc. | 89 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31).
1 2018 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 46 + 32 – 113 = -35
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | HP Inc. cash conversion cycle improved from 2016 to 2017 and from 2017 to 2018. |