Analysis of Long-term (Investment) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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Long-term Activity Ratios (Summary)
HP Inc., long-term (investment) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2019-07-31), 10-Q (reporting date: 2019-04-30), 10-Q (reporting date: 2019-01-31), 10-K (reporting date: 2018-10-31), 10-Q (reporting date: 2018-07-31), 10-Q (reporting date: 2018-04-30), 10-Q (reporting date: 2018-01-31), 10-K (reporting date: 2017-10-31), 10-Q (reporting date: 2017-07-31), 10-Q (reporting date: 2017-04-30), 10-Q (reporting date: 2017-01-31), 10-K (reporting date: 2016-10-31), 10-Q (reporting date: 2016-07-31), 10-Q (reporting date: 2016-04-30), 10-Q (reporting date: 2016-01-31), 10-K (reporting date: 2015-10-31), 10-Q (reporting date: 2015-07-31), 10-Q (reporting date: 2015-04-30), 10-Q (reporting date: 2015-01-31), 10-K (reporting date: 2014-10-31), 10-Q (reporting date: 2014-07-31), 10-Q (reporting date: 2014-04-30), 10-Q (reporting date: 2014-01-31).
The analysis of the key financial turnover ratios over the presented periods reveals notable trends and shifts in operational efficiency and asset utilization.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibited relative stability around the 9.6 to 9.99 range during the first eight quarters, ending in October 2015. Beginning January 2016, there is a marked and abrupt increase, peaking at 58.05, followed by a steady decline over the subsequent quarters. From January 2016 through July 2019, the ratio consistently declined from above 58 to 23.85. This pattern suggests a significant restructuring or revaluation of fixed assets occurred around 2016, leading initially to heightened efficiency in asset use, but with a gradual reduction potentially indicating increased asset base or declining revenue relative to fixed assets in later periods.
- Total Asset Turnover
- The total asset turnover ratio remained relatively stable and just above 1.0 during the initial eight quarters up to October 2015. From January 2016 onward, it increased sharply, reaching 3.48 and then steadily decreased over the subsequent quarters to approximately 1.81 by July 2019. This indicates an initial surge in the company’s ability to generate sales from its total asset base followed by a normalization or reduction in asset utilization efficiency. The values post-2016, though declining, remain higher than the pre-2016 averages, suggesting an overall improvement in asset turnover despite the downward trend.
- Equity Turnover
- Equity turnover data is only available through October 2015. During this period, the ratio fluctuated modestly between 3.72 and 4.17 without any clear upward or downward trend. This relatively stable pattern implies a consistent level of efficiency in generating sales from shareholders’ equity prior to 2016. The absence of data beyond this date prevents further analysis in later periods.
Overall, the data illustrates a significant shift occurring around early 2016 in the company’s asset turnover dynamics, with both net fixed asset turnover and total asset turnover ratios spiking and then trending downward. This shift may reflect strategic changes in asset management, investment, or sales performance that transformed the company’s operational structure. The initial surge and subsequent decline in turnover rates highlight a period of adjustment or transition in the utilization of assets. Equity turnover remained stable before this transition, but the lack of later data limits comprehensive assessment of shareholder equity efficiency post-2015.
Net Fixed Asset Turnover
HP Inc., net fixed asset turnover calculation (quarterly data)
| Jul 31, 2019 | Apr 30, 2019 | Jan 31, 2019 | Oct 31, 2018 | Jul 31, 2018 | Apr 30, 2018 | Jan 31, 2018 | Oct 31, 2017 | Jul 31, 2017 | Apr 30, 2017 | Jan 31, 2017 | Oct 31, 2016 | Jul 31, 2016 | Apr 30, 2016 | Jan 31, 2016 | Oct 31, 2015 | Jul 31, 2015 | Apr 30, 2015 | Jan 31, 2015 | Oct 31, 2014 | Jul 31, 2014 | Apr 30, 2014 | Jan 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Net revenue | ||||||||||||||||||||||||||||||
| Property, plant and equipment, net | ||||||||||||||||||||||||||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||||||
| Net fixed asset turnover1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Apple Inc. | ||||||||||||||||||||||||||||||
| Arista Networks Inc. | ||||||||||||||||||||||||||||||
| Cisco Systems Inc. | ||||||||||||||||||||||||||||||
| Dell Technologies Inc. | ||||||||||||||||||||||||||||||
| Super Micro Computer Inc. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2019-07-31), 10-Q (reporting date: 2019-04-30), 10-Q (reporting date: 2019-01-31), 10-K (reporting date: 2018-10-31), 10-Q (reporting date: 2018-07-31), 10-Q (reporting date: 2018-04-30), 10-Q (reporting date: 2018-01-31), 10-K (reporting date: 2017-10-31), 10-Q (reporting date: 2017-07-31), 10-Q (reporting date: 2017-04-30), 10-Q (reporting date: 2017-01-31), 10-K (reporting date: 2016-10-31), 10-Q (reporting date: 2016-07-31), 10-Q (reporting date: 2016-04-30), 10-Q (reporting date: 2016-01-31), 10-K (reporting date: 2015-10-31), 10-Q (reporting date: 2015-07-31), 10-Q (reporting date: 2015-04-30), 10-Q (reporting date: 2015-01-31), 10-K (reporting date: 2014-10-31), 10-Q (reporting date: 2014-07-31), 10-Q (reporting date: 2014-04-30), 10-Q (reporting date: 2014-01-31).
1 Q3 2019 Calculation
Net fixed asset turnover
= (Net revenueQ3 2019
+ Net revenueQ2 2019
+ Net revenueQ1 2019
+ Net revenueQ4 2018)
÷ Property, plant and equipment, net
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends in revenue, assets, and operational efficiency over the examined periods.
- Net Revenue
-
Net revenue exhibits a fluctuating but overall stable pattern in the earlier years, with figures generally ranging between approximately 25,000 and 28,000 million US dollars through 2014 and 2015. A significant decrease occurs in the period starting January 31, 2016, where quarterly revenue values drop to near half of previous amounts, fluctuating around 11,500 to 15,500 million US dollars thereafter. Despite this decline, a gradual upward trend in net revenue can be observed from early 2016 through mid-2019, indicating a moderate recovery or growth phase in the later periods.
- Property, Plant and Equipment, Net
-
The net value of property, plant, and equipment shows a slight decline from the start of the period in 2014 through 2015, decreasing from around 11,350 million to approximately 11,000 million US dollars. A marked reduction appears beginning in 2016, with reported values dropping to a range of approximately 1,500 to 2,400 million US dollars in subsequent quarters. Despite the sharp decrease compared to earlier amounts, this category reflects a steady incremental rise from 2016 onward, indicating ongoing investment or asset acquisition during this latter timeframe.
- Net Fixed Asset Turnover
-
This ratio, which measures the efficiency in using fixed assets to generate revenue, shows contrasting behavior aligned with changes in revenue and asset base. Initially, it remains relatively steady around 9.6 to 10.0 from 2014 through 2015, indicating consistent asset utilization. However, from early 2016, the ratio spikes considerably, reaching a peak above 58.0, before gradually declining to the mid-20s by mid-2019. The initial surge correlates with the significant decline in the property, plant, and equipment values, resulting in a higher turnover reflective of an asset base contraction combined with revenue stabilization. The subsequent downward trend suggests a normalization as both asset values and revenue increase concurrently.
In summary, the data depict a phase of contraction in asset base and revenue at the start of 2016, followed by recovery and growth in the ensuing years. The net fixed asset turnover ratio's sharp rise and gradual fall illustrate changes in operational efficiency relative to asset utilization in the context of these structural shifts.
Total Asset Turnover
HP Inc., total asset turnover calculation (quarterly data)
| Jul 31, 2019 | Apr 30, 2019 | Jan 31, 2019 | Oct 31, 2018 | Jul 31, 2018 | Apr 30, 2018 | Jan 31, 2018 | Oct 31, 2017 | Jul 31, 2017 | Apr 30, 2017 | Jan 31, 2017 | Oct 31, 2016 | Jul 31, 2016 | Apr 30, 2016 | Jan 31, 2016 | Oct 31, 2015 | Jul 31, 2015 | Apr 30, 2015 | Jan 31, 2015 | Oct 31, 2014 | Jul 31, 2014 | Apr 30, 2014 | Jan 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Net revenue | ||||||||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||||||
| Total asset turnover1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Total Asset Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Apple Inc. | ||||||||||||||||||||||||||||||
| Arista Networks Inc. | ||||||||||||||||||||||||||||||
| Cisco Systems Inc. | ||||||||||||||||||||||||||||||
| Dell Technologies Inc. | ||||||||||||||||||||||||||||||
| Super Micro Computer Inc. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2019-07-31), 10-Q (reporting date: 2019-04-30), 10-Q (reporting date: 2019-01-31), 10-K (reporting date: 2018-10-31), 10-Q (reporting date: 2018-07-31), 10-Q (reporting date: 2018-04-30), 10-Q (reporting date: 2018-01-31), 10-K (reporting date: 2017-10-31), 10-Q (reporting date: 2017-07-31), 10-Q (reporting date: 2017-04-30), 10-Q (reporting date: 2017-01-31), 10-K (reporting date: 2016-10-31), 10-Q (reporting date: 2016-07-31), 10-Q (reporting date: 2016-04-30), 10-Q (reporting date: 2016-01-31), 10-K (reporting date: 2015-10-31), 10-Q (reporting date: 2015-07-31), 10-Q (reporting date: 2015-04-30), 10-Q (reporting date: 2015-01-31), 10-K (reporting date: 2014-10-31), 10-Q (reporting date: 2014-07-31), 10-Q (reporting date: 2014-04-30), 10-Q (reporting date: 2014-01-31).
1 Q3 2019 Calculation
Total asset turnover
= (Net revenueQ3 2019
+ Net revenueQ2 2019
+ Net revenueQ1 2019
+ Net revenueQ4 2018)
÷ Total assets
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in net revenue, total assets, and total asset turnover over the observed periods.
- Net Revenue
-
Net revenue experienced some fluctuation over the quarters reviewed. In the earlier periods, net revenue ranged around the 25,000 to 28,000 million USD mark, showing slight declines in certain quarters, such as from January 2014 through April 2015. A significant notable drop occurred starting in January 2016, where revenue figures nearly halved compared to previous years, ranging between approximately 11,500 to 15,300 million USD. After this notable drop, net revenue showed a generally stable and mildly upward trend from 2016 to 2019, with values gradually increasing towards the later quarters, reaching around 14,600 million USD by July 2019.
- Total Assets
-
Total assets followed a different pattern compared to net revenue. Initially, assets remained relatively stable and slightly above 100,000 million USD from 2014 to 2015. In 2016, a significant change is observed, with assets values dramatically dropping to a range between approximately 25,000 and 35,000 million USD. After this sharp decrease, assets demonstrated a generally increasing trend, peaking near the end of 2017 and into early 2018 before experiencing some declines again by mid-2019, stabilizing around 32,000 million USD. This pattern indicates a possible restructuring or change in asset consolidation during the first quarter of 2016.
- Total Asset Turnover
-
The total asset turnover ratio, which measures net revenue generated per unit of asset, exhibits contrasting trends corresponding to the shifts in net revenue and total assets. In the earlier periods through 2015, ratios hovered just below or above 1.0, indicating moderate efficiency in asset use. Beginning in 2016, there was a sharp increase, with ratios peaking at over 3.4 in January 2016, then gradually declining to around 1.5 to 1.8 in subsequent years. This peak reflects the significant drop in total assets accompanied by relatively sustained net revenue, thus increasing asset utilization efficiency. Over the later periods, the ratio stabilized but remained higher than the initial years, suggesting improved asset efficiency after the major asset reduction.
Overall, the data indicate a major structural change around early 2016, where total assets significantly decreased while net revenue moderately declined, impacting the asset turnover ratio substantially. Post-2016, the company appears to have operated with a leaner asset base and maintained a relatively stable revenue generation, resulting in improved asset efficiency. The trends suggest efforts to optimize asset use while stabilizing revenue performance.
Equity Turnover
HP Inc., equity turnover calculation (quarterly data)
| Jul 31, 2019 | Apr 30, 2019 | Jan 31, 2019 | Oct 31, 2018 | Jul 31, 2018 | Apr 30, 2018 | Jan 31, 2018 | Oct 31, 2017 | Jul 31, 2017 | Apr 30, 2017 | Jan 31, 2017 | Oct 31, 2016 | Jul 31, 2016 | Apr 30, 2016 | Jan 31, 2016 | Oct 31, 2015 | Jul 31, 2015 | Apr 30, 2015 | Jan 31, 2015 | Oct 31, 2014 | Jul 31, 2014 | Apr 30, 2014 | Jan 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Net revenue | ||||||||||||||||||||||||||||||
| Total HP stockholders’ equity (deficit) | ||||||||||||||||||||||||||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||||||
| Equity turnover1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Equity Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Apple Inc. | ||||||||||||||||||||||||||||||
| Arista Networks Inc. | ||||||||||||||||||||||||||||||
| Cisco Systems Inc. | ||||||||||||||||||||||||||||||
| Dell Technologies Inc. | ||||||||||||||||||||||||||||||
| Super Micro Computer Inc. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2019-07-31), 10-Q (reporting date: 2019-04-30), 10-Q (reporting date: 2019-01-31), 10-K (reporting date: 2018-10-31), 10-Q (reporting date: 2018-07-31), 10-Q (reporting date: 2018-04-30), 10-Q (reporting date: 2018-01-31), 10-K (reporting date: 2017-10-31), 10-Q (reporting date: 2017-07-31), 10-Q (reporting date: 2017-04-30), 10-Q (reporting date: 2017-01-31), 10-K (reporting date: 2016-10-31), 10-Q (reporting date: 2016-07-31), 10-Q (reporting date: 2016-04-30), 10-Q (reporting date: 2016-01-31), 10-K (reporting date: 2015-10-31), 10-Q (reporting date: 2015-07-31), 10-Q (reporting date: 2015-04-30), 10-Q (reporting date: 2015-01-31), 10-K (reporting date: 2014-10-31), 10-Q (reporting date: 2014-07-31), 10-Q (reporting date: 2014-04-30), 10-Q (reporting date: 2014-01-31).
1 Q3 2019 Calculation
Equity turnover
= (Net revenueQ3 2019
+ Net revenueQ2 2019
+ Net revenueQ1 2019
+ Net revenueQ4 2018)
÷ Total HP stockholders’ equity (deficit)
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Revenue Trends
- The net revenue exhibits a somewhat cyclical pattern with fluctuations across the quarters. Initially, from early 2014 through the end of 2015, net revenue remains relatively stable within a range mostly between approximately $25 billion and $28 billion per quarter. A notable decline occurs starting in 2016, coinciding with a discontinuity in the pattern: values drop to roughly half the previous levels, averaging around $12 billion to $15 billion. This lower range persists from early 2016 through mid-2019, showing moderate growth within this period, with several quarters increasing toward $15 billion and beyond. This significant drop after 2015 may reflect structural changes or business segmentation impacts.
- Stockholders’ Equity Trends
- Total HP stockholders’ equity declines sharply beginning in early 2016. Before this point, equity remains positive and stable, around $26 billion to $28 billion. From 2016 onwards, equity shifts to negative territory, fluctuating but remaining negative through the observed period, with values ranging roughly from -$4.3 billion down to a low near -$600 million toward early 2019. The gradual movement of equity from deeply negative values toward less negative figures late in the timeline indicates a slow improvement or deleveraging effort, yet negative equity status persists, suggesting continued balance sheet challenges.
- Equity Turnover Ratio
- Data on equity turnover ratio is limited to 2014 and 2015. During this time, the ratio fluctuates modestly between about 3.7 and 4.2, indicating relatively consistent efficiency in generating revenue from equity. The ratio shows a slight downward trend approaching late 2015. The absence of data beyond this period precludes analysis of subsequent trends in this important efficiency measure.
- Overall Observations
- The data conveys significant changes starting in early 2016, with the company experiencing about a 50% drop in quarterly net revenue and a shift from strong positive to negative stockholders’ equity. Despite the reduction in scale (net revenue halving), a gradual upward trend in revenue within the reduced range is evident through 2019. Negative equity status throughout the latter period raises questions regarding solvency or structural financial challenges. Early period efficiency in leveraging equity was relatively stable but unavailable after 2015, limiting a full understanding of operational efficiency post-transition.