HP Inc. (NYSE:HPQ)

Net fixed asset turnover

The net fixed asset turnover ratio remained relatively stable around 9.8 to 9.83 between 2013 and 2014, followed by a slight decline to 9.32 in 2015. From 2016 onwards, there was a significant increase to approximately 27.7, maintaining similar high values through 2017 and 2018 with a slight decrease to 26.6. This indicates a notable improvement in the company’s ability to generate revenue from its fixed assets starting in 2016, potentially due to better utilization or changes in fixed asset base.

Total asset turnover

The total asset turnover ratio showed a modest increase from 1.06 in 2013 to 1.08 in 2014, then experienced a decline to 0.97 in 2015. From 2016 onwards, the ratio improved markedly, reaching 1.66, maintaining a level close to this in 2017 at 1.58, and increasing further to 1.69 in 2018. This pattern suggests enhanced efficiency in using total assets to generate sales after 2015, reflecting possibly better asset management or increased revenue relative to asset base.

Equity turnover

Equity turnover ratio was relatively stable between 2013 and 2014, recorded at 4.12 and 4.17 respectively, then declined to 3.72 in 2015. Data for subsequent years is not available, preventing trend analysis beyond 2015. The downward movement up to 2015 indicates a reduction in revenue generated per equity unit during this period.

Net Revenue

The net revenue experienced a general decline from 2013 to 2016, starting at 112,298 million USD in 2013 and decreasing to a low of 48,238 million USD in 2016. Following this low point, a modest recovery is observed with increases in 2017 and 2018, reaching 58,472 million USD, though the revenue remains significantly lower than the initial years.

Property, Plant, and Equipment (PP&E)

The value of property, plant, and equipment shows a steady decline from 11,463 million USD in 2013 to 11,090 million USD in 2015. A sharper decrease is observed in 2016, with values dropping to 1,736 million USD. After 2016, a gradual increase is noticed, with PP&E rising to 2,198 million USD by 2018.

Net Fixed Asset Turnover

The net fixed asset turnover ratio remains relatively stable between 9.8 and 9.83 during the period 2013 to 2014, then slightly decreases to 9.32 in 2015. A substantial increase occurs in 2016, peaking at 27.79 and maintaining values above 26 in the subsequent years, indicating a much higher efficiency in utilizing fixed assets to generate revenue during and after the period of reduced asset base.

Overall, the data indicates a strategic downsizing or asset reduction around 2016, accompanied by a significant drop in net revenue. However, the sharp increase in net fixed asset turnover ratio suggests an enhanced efficiency in asset utilization despite the lower asset values. The gradual recovery in net revenue and incremental growth in property, plant, and equipment values after 2016 may reflect a phase of stabilization and cautious reinvestment.

The annual financial data reveals several notable trends over the six-year period ending October 31, 2018. Net revenue exhibited a decline from 2013 to 2016, followed by a gradual recovery in subsequent years. Concurrently, total assets showed a similar pattern of decrease until 2016 and then experienced incremental growth thereafter. The total asset turnover ratio demonstrates a significant increase beginning in 2016, suggesting improved efficiency in using assets to generate revenue during the latter part of the period.

Net Revenue

Net revenue decreased steadily from US$112,298 million in 2013 to a low of US$48,238 million in 2016. After this sharp decline, revenue began a gradual recovery, reaching US$58,472 million by 2018. The initial decline indicates potential challenges in revenue generation or market conditions, while the rebound suggests stabilization or strategic improvements.

Total Assets

Total assets followed a similar trajectory, starting at US$105,676 million in 2013, declining to US$29,010 million in 2016, and then rising moderately to US$34,622 million by 2018. This significant reduction in total assets by 2016 could indicate divestitures, restructuring, or asset sales, while the subsequent growth may reflect reinvestment or asset acquisitions.

Total Asset Turnover Ratio

The total asset turnover ratio remained relatively stable around 1.06 to 1.08 from 2013 to 2014, then dropped slightly to 0.97 in 2015. Starting in 2016, there was a marked improvement, with the ratio increasing to 1.66 and maintaining elevated levels around 1.58 to 1.69 through 2018. This improvement signals enhanced operational efficiency, indicating the company generated more revenue per unit of asset after 2016 despite the lower asset base.

Net Revenue

The net revenue demonstrated a declining trend from 2013 to 2016, decreasing from $112,298 million in 2013 to $48,238 million in 2016. However, starting in 2017, the revenue showed signs of recovery, increasing to $52,056 million and further growing to $58,472 million in 2018. Despite the partial rebound, the revenue in 2018 remained significantly lower than the levels observed in 2013 and 2014.

Total HP Stockholders’ Equity (Deficit)

The stockholders' equity remained positive and relatively stable during 2013-2015, ranging between approximately $26,731 million and $27,768 million. In 2016, a notable shift occurred where equity turned negative, recording a deficit of $3,889 million. This negative trend persisted in 2017 and 2018, with deficits of $3,408 million and $639 million respectively. The reduction in the deficit from 2017 to 2018 suggests a partial improvement in equity position, though it had not yet returned to positive territory by 2018.

Equity Turnover

Equity turnover showed a declining pattern from 4.12 in 2013 to 3.72 in 2015, indicating a reduction in how efficiently the equity was being utilized to generate revenue. Data for 2016 onwards is not available, precluding a full analysis of this metric over the entire period. The available data suggest a deterioration in turnover efficiency prior to the equity deficit appearing in 2016.