HP Inc. (NYSE:HPQ)

Total Asset Turnover

The reported total asset turnover remained relatively stable from 2013 to 2015, fluctuating around 1.06 to 0.97. A significant increase occurred in 2016, reaching 1.66, and remained elevated through 2017 and 2018 at 1.58 and 1.69, respectively. The adjusted total asset turnover follows a similar pattern, showing stability in early years, a marked rise in 2016, a slight dip in 2017, and a peak in 2018 at 1.75. This indicates improved efficiency in asset utilization starting from 2016.

Current Ratio

The reported current ratio showed a gradual increase from 1.11 in 2013 to 1.23 in 2015, suggesting improved short-term liquidity. However, it then declined sharply to 0.98 in 2016 and further to 0.85 by 2018, indicating a weakening liquidity position. The adjusted current ratio presents a similar trend but with higher values initially, rising from 1.29 to 1.46 between 2013 and 2015 before decreasing substantially to 0.92 by 2018, reinforcing the observation of declining liquidity.

Debt to Equity

Reported debt to equity ratios are available only for 2013 to 2015, fluctuating between 0.73 and 0.89, showing no clear upward or downward trend before data became unavailable. The adjusted debt to equity ratio reveals stable levels from 0.58 to 0.7 in the first three years, but then experiences an extraordinary surge to 12.65 in 2017 and further to 31.1 in 2018. This sharp increase signals a significant change in capital structure or accounting adjustments, indicating highly leveraged equity positions in the later years.

Debt to Capital

The reported debt to capital ratio increased from 0.42 in 2014 to a peak of 2.32 in 2016, then decreased to 1.12 by 2018. The adjusted ratios follow a similar pattern but are lower overall and less volatile, peaking at 1.01 in 2016 and stabilizing near 0.97 in 2018. This suggests growing reliance on debt financing around 2016, followed by some deleveraging but remaining elevated compared to earlier periods.

Financial Leverage

Reported financial leverage ratios are fairly constant around 3.85 from 2013 to 2015 with no data for subsequent years. The adjusted financial leverage shows a stable range near 2.63 to 2.74 initially but then exhibits an extreme increase, reaching 48.15 in 2017 and an unprecedented 144.12 in 2018. This distortion may be due to significant adjustments or accounting changes, pointing to extraordinary leverage levels in those years.

Net Profit Margin

The reported net profit margin remained steady between 4.41% and 5.17% from 2013 to 2016, dipped slightly in 2017 to 4.85%, then surged to 9.11% in 2018, indicating a marked improvement in profitability. The adjusted margin shows fluctuations with a low of 2.15% in 2014 and a peak of 5.55% in 2017, then falling to 4.11% in 2018, suggesting some volatility but overall maintaining positive profit generation capability.

Return on Equity (ROE)

Reported ROE data is limited to 2013-2015, showing a slight decline from 18.75% to 16.4%. The adjusted ROE shows a decline in early years from 14.81% in 2013 to 6.22% in 2014, followed by a modest increase to 8.59% in 2015. Then, it spikes dramatically to 413.71% in 2017 and reaches 1033.91% in 2018, implying extraordinary returns or possibly the effect of significant adjustments or leverage impacting the equity base.

Return on Assets (ROA)

The reported ROA increased from 4.26% in 2015 to 8.6% in 2016 and continued rising to 15.39% in 2018, indicating improving efficiency in asset usage to generate profits. The adjusted ROA follows a similar trajectory, with a dip in mid-period but rising notably from 3.13% in 2015 to 8.59% in 2017 before a slight decrease to 7.17% in 2018, showing overall enhanced asset profitability.

The financial data over the analyzed periods reflects notable fluctuations in key metrics related to revenue, assets, and asset turnover ratios.

Net Revenue

The net revenue exhibits a downward trend from 2013 to 2016, falling from approximately $112.3 billion to about $48.2 billion. Subsequently, a modest recovery is observed, with net revenue increasing to $58.5 billion by 2018. This pattern suggests a significant contraction during the mid-period followed by gradual revenue growth.

Total Assets

Total assets mirror the revenue trend, declining sharply from roughly $105.7 billion in 2013 to approximately $29 billion by 2016. After this period, assets increase slightly, reaching $34.6 billion by 2018. The reduction in asset base aligns with the contraction in revenue, indicating possible asset divestitures or restructuring during the earlier years, with mild asset growth later.

Reported Total Asset Turnover Ratio

The asset turnover ratio remains relatively stable around 1.06-1.08 during 2013 and 2014, declines to below 1.0 in 2015, and then improves markedly to values above 1.5 from 2016 onwards, peaking at 1.69 in 2018. This suggests improved efficiency in generating revenue from assets after 2015, despite the smaller asset base.

Adjusted Net Revenue

The adjusted net revenue follows a pattern very similar to reported net revenue, showing a decreasing trend until 2016 followed by a recovery. The values are close to the reported figures, indicating minor adjustments that do not significantly alter the overall trend.

Adjusted Total Assets

Adjusted total assets also track closely with the reported values, declining until 2016 and then exhibiting a slight increase. The consistency between reported and adjusted assets supports the reliability of the underlying asset values.

Adjusted Total Asset Turnover Ratio

The adjusted total asset turnover ratio presents comparable behavior to the reported ratio. It remains steady above 1 in early years, dips near 1 in 2015, and then rises consistently, reaching 1.75 by 2018. This metric indicates enhanced asset utilization efficiency in later years.

Overall, the data illustrate a period of contraction and restructuring around 2015-2016 characterized by steep declines in revenue and assets. Following this phase, efficiency in asset utilization improves significantly, supporting a recovery in revenue despite a smaller asset base. The close alignment between reported and adjusted figures reinforces the validity of these observations.

Current Assets and Liabilities

Current assets remained relatively stable between 2013 and 2015, ranging from approximately 50.1 billion to 51.8 billion US dollars. However, a significant decline occurred in 2016, with current assets dropping sharply to around 18.5 billion US dollars, followed by a slight recovery in 2017 and a small decrease in 2018. Current liabilities showed a parallel trend, decreasing from approximately 45.5 billion US dollars in 2013 to 42.2 billion in 2015, then sharply falling in 2016 to about 18.8 billion US dollars before gradually increasing again in the subsequent years.

Reported Current Ratio

The reported current ratio indicated a gradual improvement from 1.11 in 2013 to 1.23 in 2015, suggesting enhanced short-term liquidity during this period. However, in 2016, the ratio dropped below 1 to 0.98, signaling potential liquidity constraints. The ratio then remained at or below 1 through 2017 (1.00) and further declined to 0.85 in 2018, indicating a weakening short-term financial position over these years.

Adjusted Financial Metrics

Adjusted current assets showed a pattern similar to the reported assets, with steady increases from 46.8 billion in 2013 to 49.7 billion in 2015, followed by a steep decline in 2016 to approximately 18.6 billion. Adjusted current liabilities decreased from 36.4 billion in 2013 to 34.0 billion in 2015, then declined sharply to 17.1 billion in 2016, before rising again by 2018. The adjusted current ratio displayed consistent improvement from 1.29 in 2013 to a peak of 1.46 in 2015, indicating stronger adjusted liquidity compared to reported data during this time. Post-2015, the ratio diminished significantly to 1.09 in 2016 and 2017 and further declined to 0.92 in 2018, reflecting deteriorating liquidity under adjusted measures.

Overall Trends and Insights

The financial data illustrates a period of stable liquidity from 2013 to 2015, followed by a sharp decline in both current assets and liabilities starting in 2016. Both reported and adjusted ratios indicate that liquidity weakened considerably from 2016 onwards, with adjusted measures generally showing stronger liquidity positions than reported figures. The decline in current ratios to below 1 in later years raises concerns about the company's ability to cover short-term obligations. These trends suggest a transition from a relatively comfortable liquidity position to more strained short-term financial conditions over the six-year period reviewed.

The financial data reveals several noteworthy trends in debt and equity over the period from 2013 to 2018.

Total Debt

Total debt decreased overall, starting at $22,587 million in 2013 and declining significantly to $5,987 million by 2018. There was a notable spike in 2015, reaching $24,665 million, followed by a sharp reduction through 2016 to 2018.

Total HP Stockholders’ Equity (Deficit)

Stockholders’ equity showed a positive value from 2013 through 2015, maintaining a relatively stable range between approximately $26,700 million and $27,800 million. However, starting in 2016, equity turned negative, recording a deficit of $3,889 million, with improvements in subsequent years but remaining negative at $639 million in 2018. This indicates a significant downturn in net assets during this period.

Reported Debt to Equity Ratio

The reported debt to equity ratio was relatively stable from 2013 through 2015, ranging between 0.73 and 0.89. Data for subsequent years is missing, limiting full trend analysis.

Adjusted Total Debt

Adjusted total debt follows a pattern similar to total debt, declining from $25,193 million in 2013 to $7,247 million in 2018. The highest adjusted debt was recorded in 2015 at $27,126 million, followed by a sharp drop in 2016.

Adjusted Total Stockholders’ Equity (Deficit)

Adjusted equity remained positive and stable from 2013 to 2015, fluctuating around $38,000 million. However, a drastic decline occurred in 2016 to a near breakeven position (-$98 million), with slight recoveries in 2017 and 2018, reaching $233 million. This reflects similar patterns observed in the unadjusted equity but shows a less severe deficit and some recovery.

Adjusted Debt to Equity Ratio

From 2013 to 2015, the adjusted debt to equity ratio was consistently below 1, indicating balanced leverage levels. There is a gap in data for 2016, but the ratio spikes sharply in 2017 to 12.65 and further to 31.1 in 2018. This significant increase reflects the sharp drop or near elimination of equity relative to debt, suggesting elevated financial risk and possible solvency concerns in the last two reported years.

Overall, the data highlights a period of relative stability in debt and equity from 2013 to 2015, followed by a marked deterioration starting in 2016. Equity positions worsened, turning negative in unadjusted figures, while adjusted equity showed near insolvency levels. Concurrently, leverage ratios escalated dramatically, particularly post-2016, indicating increased reliance on debt financing relative to equity and signaling potential financial strain during the latter years of the period.

Total Debt

Total debt exhibits a fluctuating pattern over the analyzed period. Initially, there is a decline from 22,587 million USD in 2013 to 19,525 million USD in 2014, followed by a significant increase to 24,665 million USD in 2015. After 2015, total debt sharply decreases, reaching its lowest point at 5,987 million USD in 2018.

Total Capital

Total capital follows a similar trend to total debt but with more pronounced changes. From 49,856 million USD in 2013, it decreases slightly to 46,256 million USD in 2014, then rises to 52,433 million USD in 2015. Subsequently, it shows a drastic reduction in 2016 to 2,947 million USD, partially recovering to 5,348 million USD by 2018.

Reported Debt to Capital Ratio

The reported debt to capital ratio remains below 0.5 from 2013 to 2015, indicating moderate leverage. However, starting 2016, the ratio spikes sharply to 2.32, suggesting debt levels more than double the capital reported that year, followed by a gradual decrease to 1.12 by 2018. This ratio indicates significantly increased leverage in the middle years, though improving afterward.

Adjusted Total Debt

Adjusted total debt mirrors the trend observed in total debt but with generally higher values. After dropping from 25,193 million USD in 2013 to 22,206 million USD in 2014, it rises again to 27,126 million USD in 2015. A pronounced decline follows through 2016 to 2018, where adjusted debt reaches 7,247 million USD.

Adjusted Total Capital

Adjusted total capital consistently exceeds total capital, illustrating broader considerations in capital adjustments. It slightly decreases from 64,517 million USD in 2013 to 60,623 million USD in 2014, increases to 65,901 million USD in 2015, then dramatically falls to 7,639 million USD in 2016 before partially recovering to 7,480 million USD by 2018.

Adjusted Debt to Capital Ratio

Initially, this ratio remains below 0.5 from 2013 through 2015, indicating lower leverage relative to adjusted capital. A spike occurs in 2016 reaching approximately 1.01, indicating parity between debt and capital. The ratio remains near 1 through 2017 and 2018, reflecting a maintained high leverage position relative to adjusted capital despite slight fluctuations.

Summary

The analyzed data reveals a period of relative stability in leverage and capital from 2013 to 2015, followed by significant declines in both total and adjusted capital from 2016 onward. Concurrently, leverage ratios sharply increase in 2016, indicating the company took on relatively more debt compared to its capital base during these years. While there is some recovery in capital by 2018, leverage remains elevated compared to earlier periods. This pattern suggests a restructuring or major financial event impacting capital structure around 2016, leading to increased financial risk that gradually moderates but does not revert to prior low levels by 2018.

The financial data reveals several notable trends over the six-year period from 2013 to 2018. Total assets initially maintained a relatively stable level around 105 billion US dollars from 2013 through 2015, followed by a sharp decline in 2016 to approximately 29 billion US dollars. Subsequent years show a gradual increase, reaching around 35 billion US dollars by 2018. This significant decrease in 2016 suggests a major restructuring, asset divestiture, or reclassification event impacting the asset base.

Stockholders' equity exhibits a gradual decline from about 27 billion US dollars in 2013 to approximately 27.7 billion in 2015, after which it turns negative, reaching a deficit of nearly 3.9 billion US dollars in 2016. Although the deficit slightly narrows in the following years, it remains negative through 2018, indicating ongoing equity challenges during this period. The negative equity points to potential accumulated losses or significant liabilities exceeding assets post-2015.

The reported financial leverage ratio, calculated as total assets divided by stockholders’ equity, remains stable around 3.85 from 2013 to 2015. Data for this ratio after 2015 is unavailable, likely due to the negative equity which could render the straightforward leverage calculation less meaningful or misleading.

The adjusted figures, aimed at providing a more refined assessment, show adjusted total assets mirroring the trend of the unadjusted totals but at slightly lower levels. Adjusted total equity declines from around 39 billion US dollars in 2013 to nearly 39 billion in 2015, followed by a significant drop to near zero in 2016, and then a modest recovery to a small positive value by 2018. This suggests that adjustments may have accounted for certain liabilities or other corrective measures, slightly improving the equity outlook compared to reported figures but still indicating financial strain.

Adjusted financial leverage increases modestly from 2.63 to 2.74 between 2013 and 2015, then spikes dramatically in 2017 and 2018 to 48.15 and 144.12, respectively. This sharp uptick reflects the impact of the near-zero adjusted equity in those years, exacerbating the leverage ratio and highlighting increased financial risk and reliance on debt financing post-2015.

Summary of Key Trends

Total assets remained stable initially and then dropped sharply in 2016, with a partial recovery thereafter.

Stockholders’ equity transitioned from positive to negative in the 2016 period, with slow improvement but remaining negative in reported figures.

Reported financial leverage was stable before 2016 but not reported thereafter, possibly due to negative equity complexities.

Adjusted measures present a somewhat improved picture but still show significant stress post-2015, with equity near zero and highly elevated leverage ratios.

The financial position notably weakened starting in 2016, indicating a period of restructuring, financial challenges, or major changes in accounting treatments or business scope.

Net Earnings

Net earnings experienced a decline from 2013 to 2016, falling from 5,113 million USD in 2013 to 2,496 million USD in 2016. After stabilizing around the 2,500 million USD mark in 2017, net earnings rose significantly in 2018 to 5,327 million USD, surpassing the initial 2013 level.

Net Revenue

Net revenue showed a consistent downward trend from 2013 to 2016, decreasing from 112,298 million USD in 2013 to 48,238 million USD in 2016. However, there was a noticeable recovery from 2016 onwards, with revenue increasing to 52,056 million USD in 2017 and 58,472 million USD in 2018. Overall, revenue almost halved from 2013 to 2016 but began to rebound thereafter.

Reported Net Profit Margin

The reported net profit margin remained relatively stable between 2013 and 2015, hovering around 4.5%. It increased to 5.17% in 2016, then slightly declined to 4.85% in 2017. In 2018, the margin experienced a significant increase reaching 9.11%, nearly doubling the prior year’s figure and indicating improved profitability relative to revenue.

Adjusted Net Earnings

Adjusted net earnings showed more volatility compared to reported net earnings. There was a sharp decrease from 5,822 million USD in 2013 to 2,389 million USD in 2014. The figure fluctuated through the period, with an increase to 3,330 million USD in 2015, a decline to 2,591 million USD in 2016, a slight rise to 2,896 million USD in 2017, followed by a decrease to 2,409 million USD in 2018. This pattern suggests variability in non-operating adjustments or extraordinary items affecting earnings.

Adjusted Net Revenue

Adjusted net revenue mirrored the trends in net revenue, with a decline from 111,817 million USD in 2013 to 48,159 million USD in 2016. Recovery is evident after 2016, increasing to 52,205 million USD in 2017 and 58,639 million USD in 2018. The adjusted figures consistently track closely with reported revenues, indicating that adjustments to revenue were limited or consistent over time.

Adjusted Net Profit Margin

The adjusted net profit margin declined sharply from 5.21% in 2013 to 2.15% in 2014, reflecting a significant deterioration in adjusted profitability. It recovered to 3.21% in 2015 and improved further to 5.38% in 2016 and 5.55% in 2017. However, a decline occurred in 2018, with the margin falling to 4.11%. This fluctuation implies variability in core profitability excluding certain adjustments, with strength in the middle years before a reduction in the most recent period.

The financial data reveals several notable trends over the six-year period ending in October 2018.

Net earnings

Net earnings exhibited an overall decline from 2013 through 2017, falling from 5,113 million US dollars in 2013 to a low of 2,496 million in 2016. Thereafter, a significant recovery occurred in 2018, with net earnings increasing sharply to 5,327 million US dollars.

Total HP stockholders’ equity (deficit)

The total stockholders’ equity showed a downward trajectory overall. Initial values were positive in 2013 through 2015, fluctuating around 27,000 million US dollars. However, a drastic decrease led to a deficit in 2016, reaching -3,889 million US dollars. Although there was some improvement from 2016 to 2018, equity remained negative by the end of the period at -639 million US dollars.

Reported Return on Equity (ROE)

Reported ROE was stable and relatively high in the early years, starting at 18.75% in 2013 and 2014, and then decreasing to 16.4% in 2015. Thereafter, ROE data became unavailable, suggesting possible discontinuation or restructuring.

Adjusted net earnings

Adjusted net earnings showed volatility. After a strong figure of 5,822 million US dollars in 2013, there was a sharp drop in 2014 to 2,389 million, followed by some recovery up to 3,330 million in 2015. The following years saw a decline and fluctuation, with values around 2,400 to 2,900 million US dollars, indicating ongoing earnings challenges as adjusted for specified items.

Adjusted total stockholders’ equity (deficit)

Adjusted equity maintained a large positive balance in the initial years (over 38,000 million US dollars in 2013 through 2015), before plunging near zero or negative levels in 2016 and slightly improving by 2018 to 233 million US dollars. This pattern aligns with the reported equity trend but shows higher values due to adjustments.

Adjusted Return on Equity (ROE)

Adjusted ROE declined sharply from 14.81% in 2013 to 6.22% in 2014, and then improved somewhat to 8.59% in 2015. From 2016 onwards, adjusted ROE values became extraordinary, reaching extremely high percentages of 413.71% in 2017 and 1033.91% in 2018. These inflated figures likely result from the adjusted equity being near zero or slightly positive, artificially boosting the ROE.

In summary, net earnings and equity showed significant deterioration and volatility during the midpoint of the period examined, with some recovery apparent in the latest year. The emergence of equity deficits from 2016 onwards indicates financial strain, while the extraordinary adjusted ROE figures in the final years suggest caution in interpreting profitability metrics reliant on equity values near zero or negative. The adjustments to earnings and equity appear to substantially affect reported profitability measurements over time.

Net Earnings

Net earnings demonstrated a downward trend from 2013 to 2016, declining from 5113 million US dollars to 2496 million US dollars. This was followed by a slight recovery in 2017 to 2526 million US dollars, and a significant increase in 2018 reaching 5327 million US dollars, exceeding the initial value recorded in 2013.

Total Assets

Total assets display a relatively stable trend from 2013 to 2015, ranging between approximately 103 billion and 107 billion US dollars. However, there is a marked decline in 2016 to around 29 billion US dollars, with a gradual increase thereafter to approximately 35 billion US dollars by 2018. This sharp drop in 2016 suggests a major asset revaluation, divestiture, or restructuring event.

Reported Return on Assets (ROA)

The reported ROA remained stable from 2013 to 2015, around 4.8% to 4.3%. It then experiences a notable increase in 2016, peaking at 8.6%, before a minor decline in 2017 to 7.67%, and reaching a peak in 2018 at 15.39%. This increase in ROA, particularly in 2018, indicates improved asset profitability, possibly influenced by the reduction and subsequent recovery in asset base.

Adjusted Net Earnings

Adjusted net earnings showed a sharp decline from 5822 million US dollars in 2013 to 2389 million US dollars in 2014. Subsequently, there was a recovery trend reaching 3330 million US dollars in 2015. After fluctuating, adjusted earnings decreased again in 2018 to 2409 million US dollars. Overall, adjusted net earnings did not exhibit a similar recovery pattern as reported net earnings towards 2018, indicating adjustments affected profitability differently.

Adjusted Total Assets

Adjusted total assets were relatively stable from 2013 through 2015, maintaining values above 100 billion US dollars. Similar to reported total assets, a sharp decrease occurred in 2016 to around 29.8 billion US dollars, followed by a gradual increase in 2017 and a slight decrease in 2018 remaining around 33.5 billion US dollars. This pattern reflects the significant change in asset base identified in the reported figures.

Adjusted Return on Assets (ROA)

Adjusted ROA trends show a decline from 5.63% in 2013 to 2.33% in 2014, followed by an increase to 3.13% in 2015. Thereafter, a marked improvement is seen in 2016 to 8.71%, with slight decreases in subsequent years to 8.59% in 2017 and 7.17% in 2018. Overall, adjusted ROA indicates improved asset efficiency after 2015, albeit with slightly lower returns in 2018 compared to the peak years.