Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

HP Inc. (NYSE:HPQ)

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Analysis of Property, Plant and Equipment

Advanced level

Accounting Policy on Property, Plant and Equipment

HP reflects property, plant and equipment at cost less accumulated depreciation. HP capitalizes additions and improvements and expenses maintenance and repairs as incurred. Depreciation expense is recognized on a straight-line basis over the estimated useful lives of the assets. Estimated useful lives are five to 40 years for buildings and improvements and three to 15 years for machinery and equipment. HP depreciates leasehold improvements over the life of the lease or the asset, whichever is shorter. HP depreciates equipment held for lease over the initial term of the lease to the equipment’s estimated residual value. On retirement or disposition, the asset cost and related accumulated depreciation are removed from the Consolidated Balance Sheets with any gain or loss recognized in the Consolidated Statements of Earnings.

Source: 10-K (filing date: 2018-12-13).

Property, Plant and Equipment Disclosure

HP Inc., balance sheet: property, plant and equipment

US$ in millions

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Oct 31, 2018 Oct 31, 2017 Oct 31, 2016 Oct 31, 2015 Oct 31, 2014 Oct 31, 2013
Land, buildings and leasehold improvements
Machinery and equipment, including equipment held for lease
Property, plant and equipment, gross
Accumulated depreciation
Property, plant and equipment, net

Based on: 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-14), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-16), 10-K (filing date: 2014-12-18), 10-K (filing date: 2013-12-30).

Item Description The company
Property, plant and equipment, gross Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. HP Inc.’s property, plant and equipment, gross decreased from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.
Property, plant and equipment, net Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. HP Inc.’s property, plant and equipment, net increased from 2016 to 2017 and from 2017 to 2018.

Asset Age Ratios (Summary)

HP Inc., asset age ratios

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Oct 31, 2018 Oct 31, 2017 Oct 31, 2016 Oct 31, 2015 Oct 31, 2014 Oct 31, 2013
Average age ratio
Estimated total useful life (years)
Estimated age, time elapsed since purchase (years)
Estimated remaining life (years)

Based on: 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-14), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-16), 10-K (filing date: 2014-12-18), 10-K (filing date: 2013-12-30).

Asset age ratio Description The company
Average age ratio As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. HP Inc.’s average age ratio of depreciable property, plant and equipment improved from 2016 to 2017 and from 2017 to 2018.
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. HP Inc.’s estimated total useful life of depreciable property, plant and equipment decreased from 2016 to 2017 and from 2017 to 2018.
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. HP Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2016 to 2017 and from 2017 to 2018.
Estimated remaining life HP Inc.’s estimated remaining life of depreciable property, plant and equipment decreased from 2016 to 2017 and from 2017 to 2018.

Average Age

Microsoft Excel LibreOffice Calc
Oct 31, 2018 Oct 31, 2017 Oct 31, 2016 Oct 31, 2015 Oct 31, 2014 Oct 31, 2013
Selected Financial Data (US$ in millions)
Accumulated depreciation
Property, plant and equipment, gross
Asset Age Ratio
Average age1

Based on: 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-14), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-16), 10-K (filing date: 2014-12-18), 10-K (filing date: 2013-12-30).

2018 Calculations

1 Average age = 100 × Accumulated depreciation ÷ Property, plant and equipment, gross
= 100 × ÷ =

Asset age ratio Description The company
Average age As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. HP Inc.’s average age ratio of depreciable property, plant and equipment improved from 2016 to 2017 and from 2017 to 2018.

Estimated Total Useful Life

Microsoft Excel LibreOffice Calc
Oct 31, 2018 Oct 31, 2017 Oct 31, 2016 Oct 31, 2015 Oct 31, 2014 Oct 31, 2013
Selected Financial Data (US$ in millions)
Property, plant and equipment, gross
Depreciation expense
Asset Age Ratio (Years)
Estimated total useful life1

Based on: 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-14), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-16), 10-K (filing date: 2014-12-18), 10-K (filing date: 2013-12-30).

2018 Calculations

1 Estimated total useful life = Property, plant and equipment, gross ÷ Depreciation expense
= ÷ =

Asset age ratio Description The company
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. HP Inc.’s estimated total useful life of depreciable property, plant and equipment decreased from 2016 to 2017 and from 2017 to 2018.

Estimated Age, Time Elapsed since Purchase

Microsoft Excel LibreOffice Calc
Oct 31, 2018 Oct 31, 2017 Oct 31, 2016 Oct 31, 2015 Oct 31, 2014 Oct 31, 2013
Selected Financial Data (US$ in millions)
Accumulated depreciation
Depreciation expense
Asset Age Ratio (Years)
Time elapsed since purchase1

Based on: 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-14), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-16), 10-K (filing date: 2014-12-18), 10-K (filing date: 2013-12-30).

2018 Calculations

1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= ÷ =

Asset age ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. HP Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2016 to 2017 and from 2017 to 2018.

Estimated Remaining Life

Microsoft Excel LibreOffice Calc
Oct 31, 2018 Oct 31, 2017 Oct 31, 2016 Oct 31, 2015 Oct 31, 2014 Oct 31, 2013
Selected Financial Data (US$ in millions)
Property, plant and equipment, net
Depreciation expense
Asset Age Ratio (Years)
Estimated remaining life1

Based on: 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-14), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-16), 10-K (filing date: 2014-12-18), 10-K (filing date: 2013-12-30).

2018 Calculations

1 Estimated remaining life = Property, plant and equipment, net ÷ Depreciation expense
= ÷ =

Asset age ratio Description The company
Estimated remaining life HP Inc.’s estimated remaining life of depreciable property, plant and equipment decreased from 2016 to 2017 and from 2017 to 2018.