Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
HP Inc., solvency ratios
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).
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | HP Inc. debt to capital ratio improved from 2016 to 2017 and from 2017 to 2018. |
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | HP Inc. debt to assets ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | HP Inc. interest coverage ratio deteriorated from 2016 to 2017 and from 2017 to 2018. |
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | HP Inc. fixed charge coverage ratio deteriorated from 2016 to 2017 and from 2017 to 2018. |
Debt to Equity
HP Inc., debt to equity calculation, comparison to benchmarks
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Notes payable and short-term borrowings | 1,463) | 1,072) | 78) | 2,885) | 3,486) | 5,979) | |
| Long-term debt, excluding current portion | 4,524) | 6,747) | 6,758) | 21,780) | 16,039) | 16,608) | |
| Total debt | 5,987) | 7,819) | 6,836) | 24,665) | 19,525) | 22,587) | |
| Total HP stockholders’ equity (deficit) | (639) | (3,408) | (3,889) | 27,768) | 26,731) | 27,269) | |
| Solvency Ratio | |||||||
| Debt to equity1 | — | — | — | 0.89 | 0.73 | 0.83 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Apple Inc. | 1.07 | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | 0.59 | — | — | — | — | — | |
| Super Micro Computer Inc. | 0.14 | — | — | — | — | — | |
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
Debt to equity = Total debt ÷ Total HP stockholders’ equity (deficit)
= 5,987 ÷ -639 = —
2 Click competitor name to see calculations.
Debt to Capital
HP Inc., debt to capital calculation, comparison to benchmarks
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Notes payable and short-term borrowings | 1,463) | 1,072) | 78) | 2,885) | 3,486) | 5,979) | |
| Long-term debt, excluding current portion | 4,524) | 6,747) | 6,758) | 21,780) | 16,039) | 16,608) | |
| Total debt | 5,987) | 7,819) | 6,836) | 24,665) | 19,525) | 22,587) | |
| Total HP stockholders’ equity (deficit) | (639) | (3,408) | (3,889) | 27,768) | 26,731) | 27,269) | |
| Total capital | 5,348) | 4,411) | 2,947) | 52,433) | 46,256) | 49,856) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 1.12 | 1.77 | 2.32 | 0.47 | 0.42 | 0.45 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Apple Inc. | 0.52 | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | 0.37 | — | — | — | — | — | |
| Super Micro Computer Inc. | 0.12 | — | — | — | — | — | |
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
Debt to capital = Total debt ÷ Total capital
= 5,987 ÷ 5,348 = 1.12
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | HP Inc. debt to capital ratio improved from 2016 to 2017 and from 2017 to 2018. |
Debt to Assets
HP Inc., debt to assets calculation, comparison to benchmarks
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Notes payable and short-term borrowings | 1,463) | 1,072) | 78) | 2,885) | 3,486) | 5,979) | |
| Long-term debt, excluding current portion | 4,524) | 6,747) | 6,758) | 21,780) | 16,039) | 16,608) | |
| Total debt | 5,987) | 7,819) | 6,836) | 24,665) | 19,525) | 22,587) | |
| Total assets | 34,622) | 32,913) | 29,010) | 106,882) | 103,206) | 105,676) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.17 | 0.24 | 0.24 | 0.23 | 0.19 | 0.21 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Apple Inc. | 0.31 | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | 0.24 | — | — | — | — | — | |
| Super Micro Computer Inc. | 0.07 | — | — | — | — | — | |
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
Debt to assets = Total debt ÷ Total assets
= 5,987 ÷ 34,622 = 0.17
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | HP Inc. debt to assets ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
Financial Leverage
HP Inc., financial leverage calculation, comparison to benchmarks
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | ||
|---|---|---|---|---|---|---|---|
| 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 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Apple Inc. | 3.41 | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | 2.52 | — | — | — | — | — | |
| Super Micro Computer Inc. | 2.10 | — | — | — | — | — | |
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
Financial leverage = Total assets ÷ Total HP stockholders’ equity (deficit)
= 34,622 ÷ -639 = —
2 Click competitor name to see calculations.
Interest Coverage
HP Inc., interest coverage calculation, comparison to benchmarks
| 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 earnings | 5,327) | 2,526) | 2,496) | 4,554) | 5,013) | 5,113) | |
| Less: Net loss from discontinued operations | —) | —) | (170) | —) | —) | —) | |
| Add: Income tax expense | (2,314) | 750) | 1,095) | 178) | 1,544) | 1,397) | |
| Add: Interest expense on borrowings | 312) | 309) | 273) | 327) | 344) | 426) | |
| Earnings before interest and tax (EBIT) | 3,325) | 3,585) | 4,034) | 5,059) | 6,901) | 6,936) | |
| Solvency Ratio | |||||||
| Interest coverage1 | 10.66 | 11.60 | 14.78 | 15.47 | 20.06 | 16.28 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Apple Inc. | 23.50 | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | 14.83 | — | — | — | — | — | |
| Super Micro Computer Inc. | 15.78 | — | — | — | — | — | |
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
Interest coverage = EBIT ÷ Interest expense
= 3,325 ÷ 312 = 10.66
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | HP Inc. interest coverage ratio deteriorated from 2016 to 2017 and from 2017 to 2018. |
Fixed Charge Coverage
HP Inc., fixed charge coverage calculation, comparison to benchmarks
| 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 earnings | 5,327) | 2,526) | 2,496) | 4,554) | 5,013) | 5,113) | |
| Less: Net loss from discontinued operations | —) | —) | (170) | —) | —) | —) | |
| Add: Income tax expense | (2,314) | 750) | 1,095) | 178) | 1,544) | 1,397) | |
| Add: Interest expense on borrowings | 312) | 309) | 273) | 327) | 344) | 426) | |
| Earnings before interest and tax (EBIT) | 3,325) | 3,585) | 4,034) | 5,059) | 6,901) | 6,936) | |
| Add: Rent expense | 200) | 200) | 200) | 1,000) | 1,000) | 1,000) | |
| Earnings before fixed charges and tax | 3,525) | 3,785) | 4,234) | 6,059) | 7,901) | 7,936) | |
| Interest expense on borrowings | 312) | 309) | 273) | 327) | 344) | 426) | |
| Rent expense | 200) | 200) | 200) | 1,000) | 1,000) | 1,000) | |
| Fixed charges | 512) | 509) | 473) | 1,327) | 1,344) | 1,426) | |
| Solvency Ratio | |||||||
| Fixed charge coverage1 | 6.88 | 7.44 | 8.95 | 4.57 | 5.88 | 5.57 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors2 | |||||||
| Apple Inc. | 17.42 | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | 10.41 | — | — | — | — | — | |
| Super Micro Computer Inc. | 8.28 | — | — | — | — | — | |
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
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 3,525 ÷ 512 = 6.88
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | HP Inc. fixed charge coverage ratio deteriorated from 2016 to 2017 and from 2017 to 2018. |