Return on Assets (ROA)
since 2005
Calculation
HP Inc., ROA, long-term trends, calculation
| ROA | = | 100 | × | Net earnings (loss)1 | ÷ | Total assets1 | |
|---|---|---|---|---|---|---|---|
| Oct 31, 2018 | 15.39% | = | 100 | × | 5,327) | ÷ | 34,622) |
| Oct 31, 2017 | 7.67% | = | 100 | × | 2,526) | ÷ | 32,913) |
| Oct 31, 2016 | 8.60% | = | 100 | × | 2,496) | ÷ | 29,010) |
| Oct 31, 2015 | 4.26% | = | 100 | × | 4,554) | ÷ | 106,882) |
| Oct 31, 2014 | 4.86% | = | 100 | × | 5,013) | ÷ | 103,206) |
| Oct 31, 2013 | 4.84% | = | 100 | × | 5,113) | ÷ | 105,676) |
| Oct 31, 2012 | -11.63% | = | 100 | × | (12,650) | ÷ | 108,768) |
| Oct 31, 2011 | 5.46% | = | 100 | × | 7,074) | ÷ | 129,517) |
| Oct 31, 2010 | 7.04% | = | 100 | × | 8,761) | ÷ | 124,503) |
| Oct 31, 2009 | 6.67% | = | 100 | × | 7,660) | ÷ | 114,799) |
| Oct 31, 2008 | 7.35% | = | 100 | × | 8,329) | ÷ | 113,331) |
| Oct 31, 2007 | 8.19% | = | 100 | × | 7,264) | ÷ | 88,699) |
| Oct 31, 2006 | 7.56% | = | 100 | × | 6,198) | ÷ | 81,981) |
| Oct 31, 2005 | 3.10% | = | 100 | × | 2,398) | ÷ | 77,317) |
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), 10-K (reporting date: 2012-10-31), 10-K (reporting date: 2011-10-31), 10-K (reporting date: 2010-10-31), 10-K (reporting date: 2009-10-31), 10-K (reporting date: 2008-10-31), 10-K (reporting date: 2007-10-31), 10-K (reporting date: 2006-10-31), 10-K (reporting date: 2005-10-31).
1 US$ in millions
The financial performance between 2005 and 2018 is characterized by significant volatility in profitability and a fundamental restructuring of the asset base, resulting in a substantial increase in asset utilization efficiency toward the end of the period.
- Initial Growth and Asset Expansion (2005–2011)
- A period of steady improvement in Return on Assets (ROA) is observed from 2005 to 2007, where the ratio rose from 3.10% to a peak of 8.19%. This was supported by a consistent increase in net earnings. Between 2008 and 2011, while net earnings remained relatively strong, a significant expansion in total assets—growing from 113.3 billion USD in 2008 to 129.5 billion USD in 2011—led to a gradual compression of ROA, which declined to 5.46% by October 31, 2011.
- Significant Impairment and Recovery (2012–2015)
- A severe contraction occurred in 2012, marked by a net loss of 12.65 billion USD, which drove the ROA to a negative 11.63%. This represents the lowest point of efficiency in the analyzed timeframe. A recovery phase followed from 2013 to 2015, with ROA returning to positive territory and stabilizing between 4.26% and 4.86%. During this recovery, net earnings normalized, though they remained below the peaks seen between 2008 and 2010.
- Asset Base Rationalization and Efficiency Surge (2016–2018)
- A structural shift is evident starting in 2016, characterized by a drastic reduction in total assets, which fell from 106.9 billion USD in 2015 to 29.0 billion USD in 2016. This reduction in the denominator of the ROA calculation, combined with stable net earnings, caused the ROA to jump to 8.60%. The trend toward higher efficiency accelerated through 2018, as net earnings increased to 5.33 billion USD against a lean asset base of 34.6 billion USD, resulting in a period-high ROA of 15.39%.
Overall, the data indicates a transition from an asset-heavy operational model with moderate returns to a streamlined model with significantly higher capital efficiency. The most notable transition occurred after 2015, where the company achieved its highest levels of asset productivity despite having a fraction of the assets held during the 2008–2011 peak.
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Comparison to Competitors
HP Inc., ROA, long-term trends, comparison to competitors
| HP Inc. | Apple Inc. | Arista Networks Inc. | Cisco Systems Inc. | Dell Technologies Inc. | Lumentum Holdings Inc. | Super Micro Computer Inc. | |
|---|---|---|---|---|---|---|---|
| Oct 31, 2018 | 15.39% | 16.28% | 10.65% | 0.10% | — | 15.69% | 2.61% |
| Oct 31, 2017 | 7.67% | 12.88% | 17.20% | 7.40% | — | -8.31% | 4.41% |
| Oct 31, 2016 | 8.60% | 14.20% | 10.65% | 8.83% | — | 1.28% | 6.18% |
| Oct 31, 2015 | 4.26% | 18.38% | 10.44% | 7.91% | — | -0.66% | 9.35% |
| Oct 31, 2014 | 4.86% | 17.04% | 10.71% | 7.47% | — | — | 6.80% |
| Oct 31, 2013 | 4.84% | 17.89% | — | 9.87% | — | — | 3.37% |
| Oct 31, 2012 | -11.63% | 23.70% | — | 8.76% | — | — | 5.07% |
| Oct 31, 2011 | 5.46% | 22.28% | — | 7.45% | — | — | 8.66% |
| Oct 31, 2010 | 7.04% | 18.64% | — | 9.57% | — | — | 7.26% |
| Oct 31, 2009 | 6.67% | 10.59% | — | 9.00% | — | — | 5.69% |
| Oct 31, 2008 | 7.35% | 12.22% | — | 13.71% | — | — | 9.61% |
| Oct 31, 2007 | 8.19% | 13.79% | — | 13.75% | — | — | 9.41% |
| Oct 31, 2006 | 7.56% | 11.56% | — | 12.88% | — | — | — |
| Oct 31, 2005 | 3.10% | 11.56% | — | 16.94% | — | — | — |
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), 10-K (reporting date: 2012-10-31), 10-K (reporting date: 2011-10-31), 10-K (reporting date: 2010-10-31), 10-K (reporting date: 2009-10-31), 10-K (reporting date: 2008-10-31), 10-K (reporting date: 2007-10-31), 10-K (reporting date: 2006-10-31), 10-K (reporting date: 2005-10-31).
Comparison to Sector (Technology Hardware & Equipment)
HP Inc., ROA, long-term trends, comparison to sector (technology hardware & equipment)
| HP Inc. | Technology Hardware & Equipment | |
|---|---|---|
| Oct 31, 2018 | 15.39% | 12.53% |
| Oct 31, 2017 | 7.67% | 11.43% |
| Oct 31, 2016 | 8.60% | 12.68% |
| Oct 31, 2015 | 4.26% | 15.39% |
| Oct 31, 2014 | 4.86% | 14.03% |
| Oct 31, 2013 | 4.84% | 15.23% |
| Oct 31, 2012 | -11.63% | 18.55% |
| Oct 31, 2011 | 5.46% | 15.91% |
| Oct 31, 2010 | 7.04% | 13.92% |
| Oct 31, 2009 | 6.67% | 9.70% |
| Oct 31, 2008 | 7.35% | 13.10% |
| Oct 31, 2007 | 8.19% | 13.75% |
| Oct 31, 2006 | 7.56% | 12.51% |
| Oct 31, 2005 | 3.10% | 15.57% |
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), 10-K (reporting date: 2012-10-31), 10-K (reporting date: 2011-10-31), 10-K (reporting date: 2010-10-31), 10-K (reporting date: 2009-10-31), 10-K (reporting date: 2008-10-31), 10-K (reporting date: 2007-10-31), 10-K (reporting date: 2006-10-31), 10-K (reporting date: 2005-10-31).
Comparison to Industry (Information Technology)
HP Inc., ROA, long-term trends, comparison to industry (information technology)
| HP Inc. | Information Technology | |
|---|---|---|
| Oct 31, 2018 | 15.39% | 10.94% |
| Oct 31, 2017 | 7.67% | 9.00% |
| Oct 31, 2016 | 8.60% | 9.68% |
| Oct 31, 2015 | 4.26% | 11.51% |
| Oct 31, 2014 | 4.86% | 12.33% |
| Oct 31, 2013 | 4.84% | 13.22% |
| Oct 31, 2012 | -11.63% | 14.06% |
| Oct 31, 2011 | 5.46% | 15.11% |
| Oct 31, 2010 | 7.04% | 14.45% |
| Oct 31, 2009 | 6.67% | 10.04% |
| Oct 31, 2008 | 7.35% | 11.87% |
| Oct 31, 2007 | 8.19% | 11.93% |
| Oct 31, 2006 | 7.56% | 12.20% |
| Oct 31, 2005 | 3.10% | 12.71% |
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), 10-K (reporting date: 2012-10-31), 10-K (reporting date: 2011-10-31), 10-K (reporting date: 2010-10-31), 10-K (reporting date: 2009-10-31), 10-K (reporting date: 2008-10-31), 10-K (reporting date: 2007-10-31), 10-K (reporting date: 2006-10-31), 10-K (reporting date: 2005-10-31).