Stock Analysis on Net
Stock Analysis on Net

HP Inc. (NYSE:HPQ)

This company has been moved to the archive! The financial data has not been updated since August 29, 2019.

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Goodwill and Intangible Asset Disclosure

HP Inc., balance sheet: goodwill and intangible assets

US$ in millions

Microsoft Excel
Oct 31, 2018 Oct 31, 2017 Oct 31, 2016 Oct 31, 2015 Oct 31, 2014 Oct 31, 2013
Customer contracts, customer lists and distribution agreements 112 85 — 4,455 4,433 4,465
Technology and patents 601 98 — 2,174 2,128 3,193
Trade name and trade marks — — — 122 357 394
In-process research and development — — — 159 — 3
Intangible assets, gross 713 183 — 6,910 6,918 8,055
Accumulated amortization (260) (180) — (4,896) (4,790) (4,886)
Intangible assets, net 453 3 — 2,014 2,128 3,169
Goodwill 5,968 5,622 5,622 32,941 31,139 31,124
Goodwill and purchased intangible assets 6,421 5,625 5,622 34,955 33,267 34,293

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).

Item Description The company
Intangible assets, net Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. HP Inc. intangible assets, net increased from 2016 to 2017 and from 2017 to 2018.
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.
Goodwill and purchased intangible assets Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. HP Inc. goodwill and purchased intangible assets increased from 2016 to 2017 and from 2017 to 2018.

Adjustments to Financial Statements: Removal of Goodwill

HP Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Oct 31, 2018 Oct 31, 2017 Oct 31, 2016 Oct 31, 2015 Oct 31, 2014 Oct 31, 2013
Adjustment to Total Assets
Total assets (as reported) 34,622 32,913 29,010 106,882 103,206 105,676
Less: Goodwill 5,968 5,622 5,622 32,941 31,139 31,124
Total assets (adjusted) 28,654 27,291 23,388 73,941 72,067 74,552
Adjustment to Total HP Stockholders’ Equity (deficit)
Total HP stockholders’ equity (deficit) (as reported) (639) (3,408) (3,889) 27,768 26,731 27,269
Less: Goodwill 5,968 5,622 5,622 32,941 31,139 31,124
Total HP stockholders’ equity (deficit) (adjusted) (6,607) (9,030) (9,511) (5,173) (4,408) (3,855)

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).

HP Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

HP Inc., adjusted financial ratios

Microsoft Excel
Oct 31, 2018 Oct 31, 2017 Oct 31, 2016 Oct 31, 2015 Oct 31, 2014 Oct 31, 2013
Total Asset Turnover
Reported total asset turnover 1.69 1.58 1.66 0.97 1.08 1.06
Adjusted total asset turnover 2.04 1.91 2.06 1.40 1.55 1.51
Financial Leverage
Reported financial leverage — — — 3.85 3.86 3.88
Adjusted financial leverage — — — — — —
Return on Equity (ROE)
Reported ROE — — — 16.40% 18.75% 18.75%
Adjusted ROE — — — — — —
Return on Assets (ROA)
Reported ROA 15.39% 7.67% 8.60% 4.26% 4.86% 4.84%
Adjusted ROA 18.59% 9.26% 10.67% 6.16% 6.96% 6.86%

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).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. HP Inc. adjusted total asset turnover ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. HP Inc. adjusted ROA deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

HP Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel
Oct 31, 2018 Oct 31, 2017 Oct 31, 2016 Oct 31, 2015 Oct 31, 2014 Oct 31, 2013
As Reported
Selected Financial Data (US$ in millions)
Net revenue 58,472 52,056 48,238 103,355 111,454 112,298
Total assets 34,622 32,913 29,010 106,882 103,206 105,676
Activity Ratio
Total asset turnover1 1.69 1.58 1.66 0.97 1.08 1.06
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net revenue 58,472 52,056 48,238 103,355 111,454 112,298
Adjusted total assets 28,654 27,291 23,388 73,941 72,067 74,552
Activity Ratio
Adjusted total asset turnover2 2.04 1.91 2.06 1.40 1.55 1.51

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).

2018 Calculations

1 Total asset turnover = Net revenue ÷ Total assets
= 58,472 ÷ 34,622 = 1.69

2 Adjusted total asset turnover = Net revenue ÷ Adjusted total assets
= 58,472 ÷ 28,654 = 2.04

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. HP Inc. adjusted total asset turnover ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level.

Adjusted Financial Leverage

Microsoft Excel
Oct 31, 2018 Oct 31, 2017 Oct 31, 2016 Oct 31, 2015 Oct 31, 2014 Oct 31, 2013
As Reported
Selected Financial Data (US$ in millions)
Total assets 34,622 32,913 29,010 106,882 103,206 105,676
Total HP stockholders’ equity (deficit) (639) (3,408) (3,889) 27,768 26,731 27,269
Solvency Ratio
Financial leverage1 — — — 3.85 3.86 3.88
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 28,654 27,291 23,388 73,941 72,067 74,552
Adjusted total HP stockholders’ equity (deficit) (6,607) (9,030) (9,511) (5,173) (4,408) (3,855)
Solvency Ratio
Adjusted financial leverage2 — — — — — —

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).

2018 Calculations

1 Financial leverage = Total assets ÷ Total HP stockholders’ equity (deficit)
= 34,622 ÷ -639 = —

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total HP stockholders’ equity (deficit)
= 28,654 ÷ -6,607 = —

Adjusted Return on Equity (ROE)

Microsoft Excel
Oct 31, 2018 Oct 31, 2017 Oct 31, 2016 Oct 31, 2015 Oct 31, 2014 Oct 31, 2013
As Reported
Selected Financial Data (US$ in millions)
Net earnings 5,327 2,526 2,496 4,554 5,013 5,113
Total HP stockholders’ equity (deficit) (639) (3,408) (3,889) 27,768 26,731 27,269
Profitability Ratio
ROE1 — — — 16.40% 18.75% 18.75%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings 5,327 2,526 2,496 4,554 5,013 5,113
Adjusted total HP stockholders’ equity (deficit) (6,607) (9,030) (9,511) (5,173) (4,408) (3,855)
Profitability Ratio
Adjusted ROE2 — — — — — —

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).

2018 Calculations

1 ROE = 100 × Net earnings ÷ Total HP stockholders’ equity (deficit)
= 100 × 5,327 ÷ -639 = —

2 Adjusted ROE = 100 × Net earnings ÷ Adjusted total HP stockholders’ equity (deficit)
= 100 × 5,327 ÷ -6,607 = —

Adjusted Return on Assets (ROA)

Microsoft Excel
Oct 31, 2018 Oct 31, 2017 Oct 31, 2016 Oct 31, 2015 Oct 31, 2014 Oct 31, 2013
As Reported
Selected Financial Data (US$ in millions)
Net earnings 5,327 2,526 2,496 4,554 5,013 5,113
Total assets 34,622 32,913 29,010 106,882 103,206 105,676
Profitability Ratio
ROA1 15.39% 7.67% 8.60% 4.26% 4.86% 4.84%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings 5,327 2,526 2,496 4,554 5,013 5,113
Adjusted total assets 28,654 27,291 23,388 73,941 72,067 74,552
Profitability Ratio
Adjusted ROA2 18.59% 9.26% 10.67% 6.16% 6.96% 6.86%

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).

2018 Calculations

1 ROA = 100 × Net earnings ÷ Total assets
= 100 × 5,327 ÷ 34,622 = 15.39%

2 Adjusted ROA = 100 × Net earnings ÷ Adjusted total assets
= 100 × 5,327 ÷ 28,654 = 18.59%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. HP Inc. adjusted ROA deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.