Analysis of Geographic Areas
HP Inc. operates in 2 regions: United States and Other countries.
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- Income Statement
- Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Net Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Price to Sales (P/S) since 2005
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Area Asset Turnover
HP Inc., asset turnover by geographic area
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | |
|---|---|---|---|---|---|---|
| United States | ||||||
| Other countries |
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).
- United States Asset Turnover
- The asset turnover ratio in the United States demonstrated relative stability in the initial three periods, holding steady at approximately 7.26 in 2013, and then slightly declining to 6.85 in both 2014 and 2015. A significant inflection point occurred in 2016 where the ratio sharply increased to 24.48, followed by a gradual decline in subsequent years to 22.31 in 2017 and 22.03 in 2018. Despite the decrease after 2016, the turnover ratio remained substantially higher than the earlier years, indicating a marked improvement in asset utilization efficiency during the period from 2016 onwards.
- Other Countries Asset Turnover
- For regions outside the United States, the asset turnover ratio exhibited a modest fluctuation from 12.17 in 2013 to 12.81 in 2014, then a slight decrease to 11.75 in 2015. Beginning in 2016, there was a notable increase that peaked at 32.35 in 2017, before experiencing a minor decline to 29.98 in 2018. This pattern suggests an overall positive trend in asset turnover efficiency internationally, particularly highlighted by strong gains during the 2016-2017 timeframe.
- Comparative Insights
- Both geographic segments showed significant improvement starting in 2016, with the United States and other countries experiencing sharp increases in asset turnover ratios. The growth implies enhanced effectiveness in leveraging assets to generate revenue during this period. While the United States began with a lower asset turnover ratio than other countries, it experienced a proportionally larger increase. Conversely, other countries maintained a consistently higher turnover ratio throughout the observed years, except for the initial 2013-2015 period where the gap was narrower. The slight declines in the final years for both regions may indicate a stabilization phase following rapid growth.
Area Asset Turnover: United States
HP Inc.; United States; area asset turnover calculation
| 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 | ||||||
| Net property, plant and equipment | ||||||
| Area Activity Ratio | ||||||
| Area asset turnover1 | ||||||
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
Area asset turnover = Net revenue ÷ Net property, plant and equipment
= ÷ =
- Net Revenue
- The net revenue in the United States shows a declining trend from 2013 to 2015, decreasing from 40,284 million USD to 37,679 million USD. However, there is a significant drop in 2016 to 18,042 million USD, followed by a gradual recovery in 2017 and 2018, reaching 20,602 million USD. Despite this partial recovery, the revenue in 2018 remains substantially lower than the levels observed from 2013 to 2015.
- Net Property, Plant and Equipment
- The net property, plant, and equipment values remain relatively stable from 2013 to 2015, with a slight decline from 5,546 million USD to 5,501 million USD. In 2016, there is a pronounced decrease to 737 million USD, followed by a modest increase in the subsequent years, ending at 935 million USD in 2018. This indicates a significant reduction in physical assets during 2016, with a limited asset base in the following years.
- Area Asset Turnover
- The area asset turnover ratio declines slightly from 7.26 in 2013 to 6.85 in 2014 and remains stable in 2015. From 2016 onwards, there is a sharp increase, peaking at 24.48 in 2016, then decreasing slightly in 2017 and 2018 to around 22. This sharp rise corresponds with the substantial drop in net property, plant, and equipment, suggesting improved efficiency or higher revenue generated per unit of asset during the period of reduced asset base.
Area Asset Turnover: Other countries
HP Inc.; Other countries; area asset turnover calculation
| 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 | ||||||
| Net property, plant and equipment | ||||||
| Area Activity Ratio | ||||||
| Area asset turnover1 | ||||||
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
Area asset turnover = Net revenue ÷ Net property, plant and equipment
= ÷ =
- Net revenue
- The net revenue shows a fluctuating trend over the six-year period. Starting at 72,014 million US dollars in 2013, it experienced a slight increase to 72,649 million in 2014. However, there was a notable decline in 2015, dropping to 65,676 million. A significant drop is observed in 2016, where the revenue fell sharply to 30,196 million. From 2016 onwards, there is a gradual recovery with revenues increasing to 32,735 million in 2017 and further to 37,870 million in 2018. Overall, the revenue in 2018 remains considerably lower than the initial values in 2013 and 2014.
- Net property, plant and equipment
- This asset category experienced a downward trend from 2013 to 2015, decreasing from 5,917 million US dollars to 5,589 million. In 2016, there is a pronounced reduction to 999 million, indicating a significant asset base contraction. Following this sharp decline, a slight increase is evident in subsequent years, reaching 1,012 million in 2017 and 1,263 million in 2018. Despite the midpoint decline, the net property, plant, and equipment figures in later years remain well below the initial levels.
- Area asset turnover (ratio)
- The area asset turnover ratio exhibits volatility but with an overall upward tendency over the period. Starting at 12.17 in 2013, it saw a mild increase to 12.81 in 2014 before decreasing slightly to 11.75 in 2015. Thereafter, a substantial increase is observed in 2016, with the ratio jumping dramatically to 30.23. This rising trend continues through 2017 and 2018, reaching 32.35 and 29.98 respectively. This pattern suggests improved efficiency in generating revenue relative to asset levels, particularly after the sharp asset base reduction.
Net revenue
HP Inc., net revenue by geographic area
US$ in millions
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | |
|---|---|---|---|---|---|---|
| United States | ||||||
| Other countries | ||||||
| Total |
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).
- United States Revenue Trend
- The net revenue in the United States region demonstrates a declining trend from 2013 to 2015, decreasing from $40,284 million to $37,679 million. A notable sharp decline occurred in 2016, with revenue falling to $18,042 million, less than half of the previous year’s amount. Subsequently, there is a gradual recovery observed in 2017 and 2018, where revenues increased to $19,321 million and $20,602 million, respectively.
- Other Countries Revenue Trend
- Revenue from other countries remained relatively stable in the initial three years, starting at $72,014 million in 2013 and slightly increasing to $72,649 million in 2014 before decreasing to $65,676 million in 2015. A significant drop is evident in 2016, where revenue amounts sharply decreased to $30,196 million. After 2016, the revenue shows consistent recovery, with growth observed in 2017 and 2018, reaching $32,735 million and $37,870 million, respectively.
- Total Revenue Overview
- Total net revenue exhibits a pattern that closely follows the combined trends of the United States and other countries. The total revenue decreased gradually from $112,298 million in 2013 to $103,355 million in 2015, followed by a substantial decline in 2016 to $48,238 million. The subsequent recovery phase is evident in 2017 and 2018, with total revenue increasing to $52,056 million and $58,472 million, respectively.
- Summary of Observations
- The data highlights a pronounced revenue decline across all geographic areas in 2016, amounting to approximately a 50% reduction compared to the preceding year. This sharp decrease could indicate significant operational, market, or accounting changes during that fiscal period. The recovery observed post-2016 suggests efforts toward stabilization and growth, though revenue levels by 2018 have not returned to the pre-2016 figures. Both the United States and other countries follow similar patterns, indicating that the decline and subsequent recovery were widespread rather than localized to a specific geography.
Net property, plant and equipment
HP Inc., net property, plant and equipment by geographic area
US$ in millions
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | |
|---|---|---|---|---|---|---|
| United States | ||||||
| Other countries | ||||||
| Total |
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).
- United States Net Property, Plant and Equipment
- The value showed a relatively stable trend from 2013 to 2015, with figures fluctuating slightly around the 5500 million USD mark. However, a significant decrease is observed in 2016, dropping sharply to 737 million USD. Following this decline, there is a gradual recovery over the next two years, increasing to 866 million USD in 2017 and 935 million USD in 2018. Despite this improvement, the values in the latter years remain substantially lower compared to the earlier period.
- Other Countries Net Property, Plant and Equipment
- Values for other countries start at 5917 million USD in 2013 and exhibit a marginal declining trend through 2015, reaching 5589 million USD. In 2016, a marked reduction occurs, with the value dropping to 999 million USD, followed by a slight increase to 1012 million USD in 2017 and a further notable rise to 1263 million USD in 2018. Similar to the United States segment, the values after 2015 are significantly lower but demonstrate an upward trajectory toward the end of the period.
- Total Net Property, Plant and Equipment
- The total figure, aggregating both geographic areas, shows a stable trend from 2013 to 2015, moving from 11463 million USD down slightly to 11090 million USD. A pronounced decline is evident in 2016 where the total drops sharply to 1736 million USD. The subsequent years reveal gradual recovery with totals of 1878 million USD in 2017 and 2198 million USD in 2018. Despite this resurgence, the overall values post-2015 are considerably reduced compared to the earlier periods, indicating a significant adjustment or reclassification during the timeline analyzed.