Analysis of Profitability Ratios
Quarterly Data
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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Profitability Ratios (Summary)
HP Inc., profitability 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), 10-K (reporting date: 2013-10-31), 10-Q (reporting date: 2013-07-31), 10-Q (reporting date: 2013-04-30), 10-Q (reporting date: 2013-01-31).
The analysis of the quarterly financial performance reveals distinct trends across profitability and efficiency metrics over the observed periods.
- Gross Profit Margin
- The gross profit margin exhibits a noticeable decline over time. Initially reported at approximately 23.08% to 24.03% between early 2013 and mid-2015, it gradually decreases to stabilize around the 18.2% to 18.6% range by 2018 and 2019. This downward trend suggests increasing cost pressures or reduced pricing power impacting the company's core profitability.
- Operating Profit Margin
- Operating profit margin shows more stability relative to gross margin but also follows a mild downward trend initially, dipping from values around 6.35%-6.79% in 2013-2014 down to approximately 5.05% in early 2016. However, from 2016 onward, the margin recovers and fluctuates between 6.18% and 7.36%, indicating operational efficiencies or cost management efforts helping to regain profitability at the operating level.
- Net Profit Margin
- The net profit margin reflects moderate variability but an overall upward movement, starting near 4.55%-4.92% in 2013-2014, maintaining levels close to 4.3%-5.42% through 2016, and then increasing significantly from 7.15% in early 2018 to a peak of 9.11% in early 2019. This improvement in the bottom-line profitability could be attributed to enhancements in cost control, tax strategy, or non-operational income factors boosting net earnings.
- Return on Equity (ROE)
- Return on equity, available up to early 2015, demonstrates a decreasing trajectory, dropping from approximately 19.52% in mid-2013 to about 16.4% in early 2015. This indicates diminishing effectiveness in generating returns from shareholders' equity during that period, potentially due to changes in net income, equity base, or capital structure.
- Return on Assets (ROA)
- The return on assets data presents a complex pattern with gaps and volatile values. Early periods (2013-2014) show consistent figures around 4.84%-5.29%, followed by a spike in 2016 with reported figures dramatically jumping to over 12%-15%, though the cause of these spikes is unclear from the data alone. Later periods see more moderate and stable values around 7%-13%, suggesting fluctuations in asset utilization efficiency possibly linked to operational changes or asset base alterations.
Overall, the reviewed metrics indicate that while gross profit margins have contracted over time, improvements in operating efficiency and net profitability have been achieved. The net profit margin's upward trend and operating margin stabilization post-2016 imply effective management responses to margin pressures. However, the decline in return on equity up to early 2015 and fluctuating return on assets highlight areas where capital and asset utilization effectiveness could have been challenged within specific intervals.
Return on Sales
Return on Investment
Gross Profit Margin
HP Inc., gross profit margin 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 | Oct 31, 2013 | Jul 31, 2013 | Apr 30, 2013 | Jan 31, 2013 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||||||||
| Net revenue | |||||||||||||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||||||||||||
| Gross profit margin1 | |||||||||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||||||||
| Gross Profit Margin, 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), 10-K (reporting date: 2013-10-31), 10-Q (reporting date: 2013-07-31), 10-Q (reporting date: 2013-04-30), 10-Q (reporting date: 2013-01-31).
1 Q3 2019 Calculation
Gross profit margin = 100
× (Gross profitQ3 2019
+ Gross profitQ2 2019
+ Gross profitQ1 2019
+ Gross profitQ4 2018)
÷ (Net revenueQ3 2019
+ Net revenueQ2 2019
+ Net revenueQ1 2019
+ Net revenueQ4 2018)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The financial data reveals several noteworthy trends in the company's quarterly performance between early 2013 and mid-2019. An analysis of gross profit, net revenue, and gross profit margin highlights both fluctuations and structural changes over this period.
- Gross Profit
- Gross profit values demonstrate some volatility but generally exhibit a declining trend from 2013 through 2016. Early quarters in 2013 show gross profit levels around 6,300 to 6,700 million US dollars. However, starting in 2015 and continuing into 2016, gross profit figures drop significantly, reaching levels near 2,200 to 2,300 million USD in multiple quarters. From 2017 onward, gross profit stabilizes somewhat, fluctuating around 2,400 to 2,700 million USD, with a modest upward tendency observed in 2018 and 2019, suggesting some recovery or efficiency improvements in recent years.
- Net Revenue
- Net revenue follows a broader downward trajectory when comparing early 2013 values against those in 2016. Initial quarters display revenues in the range of approximately 27,000 to 29,000 million USD, but a marked reduction occurs through 2014 and 2015, dipping to around 11,500 to 12,500 million USD by early 2016. Post-2016, net revenue shows a gradual rebound, increasing steadily to approximately 14,000 to 15,000 million USD by mid-2019. This recovery phase points to possible strategic adjustments or market conditions improving sales performance after a significant trough.
- Gross Profit Margin
- The gross profit margin data, available from early 2014, reveals a distinct decline over time. Margins start off in the 23–24% range during 2014 and early 2015, indicating relatively strong profitability on sales. However, from late 2015 through the end of the data series in 2019, the margin steadily decreases, stabilizing around 18 to 18.6%. This contraction in gross profit margin suggests increasing cost pressures or pricing challenges affecting profitability despite the partial recovery in gross profit and net revenue in later years.
Overall, the data indicates a period of financial contraction marked by declines in both revenue and gross profit in the mid-series years, accompanied by a declining gross profit margin. The later quarters exhibit signs of stabilization and gradual improvement in revenue and gross profit levels, yet profitability on sales remains under pressure compared to earlier years. These patterns may reflect shifting market conditions, operational challenges, or strategic realignment efforts impacting the company's financial performance over this timeframe.
Operating Profit Margin
HP Inc., operating profit margin 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 | Oct 31, 2013 | Jul 31, 2013 | Apr 30, 2013 | Jan 31, 2013 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||||||||
| Earnings from operations | |||||||||||||||||||||||||||||||||||
| Net revenue | |||||||||||||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||||||||||||
| Operating profit margin1 | |||||||||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||||||||
| Operating Profit Margin, 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), 10-K (reporting date: 2013-10-31), 10-Q (reporting date: 2013-07-31), 10-Q (reporting date: 2013-04-30), 10-Q (reporting date: 2013-01-31).
1 Q3 2019 Calculation
Operating profit margin = 100
× (Earnings from operationsQ3 2019
+ Earnings from operationsQ2 2019
+ Earnings from operationsQ1 2019
+ Earnings from operationsQ4 2018)
÷ (Net revenueQ3 2019
+ Net revenueQ2 2019
+ Net revenueQ1 2019
+ Net revenueQ4 2018)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The earnings from operations demonstrate a fluctuating but generally declining trend over the observed periods. Initially, earnings rose from 1,752 million US dollars in January 2013 to a peak near 1,923 million in October 2013. This was followed by a downward trend with occasional recoveries, reaching one of the lowest points at 663 million in January 2017. Afterward, earnings showed some volatility but remained below the early-period highs, closing at 1,079 million in July 2019.
Net revenue presents a relatively stable but seasonally varying pattern. Throughout early periods, revenue hovered around the high 27,000 to low 29,000 million US dollars range. Starting in 2015, quarterly revenues dropped sharply, notably around the first quarter, with values close to the 12,000 million mark observed in early 2016, which may indicate a change in reporting or business structure. Following this, revenues gradually increased again, reaching about 14,600 million US dollars by the middle of 2019. Despite some seasonal dips, the overall figure exhibits recovery and growth after a notable decrease.
Operating profit margin, available from mid-2013 onward, remained relatively steady within a narrow band between approximately 5.0% and 7.4%. Margins started around 6.3% in early measurement periods and saw a slight deterioration around 2015 to 5.1%. A rebound is observed beginning in late 2016, with margins peaking close to 7.4% in early 2017, followed by minor fluctuations but maintaining an average near 6.8% in subsequent periods. This indicates some improvement in operational efficiency or cost management after mid-2015.
Overall, the financial metrics reflect a company experiencing challenges in earnings generation despite relatively stable net revenue and modestly improving profit margins. The divergence between decreasing earnings from operations and recovering revenues suggests rising costs or other factors affecting operational profitability. The recovery in operating margins post-2016 may point toward strategic initiatives to improve efficiency, yet earnings continued to display volatility, implying fluctuating operational performance or external economic influences impacting net profitability.
- Earnings from Operations
- Peaked in late 2013, declined through 2017 with volatility thereafter, ending lower than initial values.
- Net Revenue
- Generally stable with seasonal variances, a sharp drop around 2015-2016, then gradual recovery by 2019.
- Operating Profit Margin
- Stable but low variation, decreased mid-period, then recovered to near initial levels with minor fluctuations.
Net Profit Margin
HP Inc., net profit margin 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 | Oct 31, 2013 | Jul 31, 2013 | Apr 30, 2013 | Jan 31, 2013 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||||||||
| Net earnings | |||||||||||||||||||||||||||||||||||
| Net revenue | |||||||||||||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||||||||||||
| Net profit margin1 | |||||||||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||||||||
| Net Profit Margin, 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), 10-K (reporting date: 2013-10-31), 10-Q (reporting date: 2013-07-31), 10-Q (reporting date: 2013-04-30), 10-Q (reporting date: 2013-01-31).
1 Q3 2019 Calculation
Net profit margin = 100
× (Net earningsQ3 2019
+ Net earningsQ2 2019
+ Net earningsQ1 2019
+ Net earningsQ4 2018)
÷ (Net revenueQ3 2019
+ Net revenueQ2 2019
+ Net revenueQ1 2019
+ Net revenueQ4 2018)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The financial data reveals several notable trends in the company's quarterly performance over the observed periods. Net earnings demonstrate considerable fluctuations, with values ranging from a low of 492 million US dollars in October 2016 to a high of 1938 million US dollars in January 2018. An overall pattern shows cyclical variations in net earnings, with some quarters exhibiting substantial increases followed by decreases in subsequent periods. For example, net earnings sharply increased to 1938 million in early 2018, then declined to 1058 million in the next quarter before stabilizing at higher levels than earlier in the dataset.
Net revenue exhibits a relatively stable trend with moderate fluctuations, generally maintaining a range between approximately 11,500 million and 15,500 million US dollars in the later years. Earlier data points show higher values, close to the range of 25,000 to 29,000 million US dollars, indicating a change in reporting scope or format starting from January 2016, when reported revenue values appear roughly halved. Despite this adjustment, revenue maintains a consistent upward trend from 2016 onward, reaching peaks in the final periods at around 14,500 to 15,300 million US dollars.
The net profit margin percentages, available from October 2013, reveal a gradual improvement over time. The margin starts just above 4.5% and generally increases, with some minor dips, to exceed 7% in several quarters after 2017. The highest recorded margin is 9.11% in January 2019, indicating enhanced profitability relative to revenue during that period. This trend suggests improved operational efficiency or cost management contributing to higher profitability ratios.
In summary, while net earnings show notable volatility, net revenue has stabilized and grown moderately following an apparent reporting shift. The net profit margin trend reflects improving profitability, suggesting the company has been enhancing its earnings quality relative to sales over the examined timeframe. These patterns indicate a focus on profitability optimization amid varying earnings and revenue conditions.
Return on Equity (ROE)
HP Inc., ROE 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 | Oct 31, 2013 | Jul 31, 2013 | Apr 30, 2013 | Jan 31, 2013 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||||||||
| Net earnings | |||||||||||||||||||||||||||||||||||
| Total HP stockholders’ equity (deficit) | |||||||||||||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||||||||||||
| ROE1 | |||||||||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||||||||
| ROE, 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), 10-K (reporting date: 2013-10-31), 10-Q (reporting date: 2013-07-31), 10-Q (reporting date: 2013-04-30), 10-Q (reporting date: 2013-01-31).
1 Q3 2019 Calculation
ROE = 100
× (Net earningsQ3 2019
+ Net earningsQ2 2019
+ Net earningsQ1 2019
+ Net earningsQ4 2018)
÷ Total HP stockholders’ equity (deficit)
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The financial data reveals several noteworthy trends in profitability and equity positions over the analyzed periods. Net earnings exhibit considerable fluctuations across the quarterly intervals, with multiple peaks and troughs. Initial quarters from 2013 to early 2014 show relatively stable earnings, mostly ranging between approximately 1000 and 1400 million USD. However, earnings decline notably in mid-2014, followed by a rebound toward the end of 2014 and early 2015. A marked downturn occurs in 2016, where the net earnings decrease substantially, reaching a low point near 492 million USD in the final quarter of that year. After some intermittent recovery in 2017 and 2018, a significant peak appears in the first quarter of 2018, with earnings hitting 1938 million USD, the highest in the dataset, followed by another cycle of decline and partial recovery through mid-2019.
The total HP stockholders' equity demonstrates a contrasting trend. From 2013 through 2015, equity values are positive and generally increase from approximately 22,800 million USD to nearly 28,000 million USD. A dramatic shift occurs starting in early 2016, where equity values plunge sharply into a negative range and remain negative throughout the subsequent quarters. The lowest deficits are observed around early to mid-2016, followed by fluctuating negative values that, while improving somewhat by 2019, still do not return to positive territory. This persistent negative equity position over multiple periods may suggest significant challenges related to company liabilities or other financial adjustments during this timeframe.
Return on equity (ROE) data is available only for a limited range of quarters, specifically mid-2013 to early 2014. The ROE in these periods remains consistently high, between approximately 16.4% and 19.5%, indicating strong profitability relative to shareholder equity during that interval. The absence of ROE data in later periods limits trend analysis for this ratio beyond early 2014; however, the deteriorating equity base observed after 2015 would likely impact ROE calculations and financial returns to shareholders adversely.
In summary, net earnings show volatility with periods of both strong earnings and declines, while stockholders’ equity transitions sharply from positive to negative territory starting in 2016 and remains negative through 2019. Early period ROE values suggest effective capital utilization up to early 2014, but subsequent financial developments, especially the equity deficits, indicate potential underlying financial stresses affecting shareholder value. These patterns collectively underline a period of considerable financial instability and restructuring challenges during the later years of the examined timeframe.
Return on Assets (ROA)
HP Inc., ROA 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 | Oct 31, 2013 | Jul 31, 2013 | Apr 30, 2013 | Jan 31, 2013 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||||||||
| Net earnings | |||||||||||||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||||||||||||
| ROA1 | |||||||||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||||||||
| ROA, 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), 10-K (reporting date: 2013-10-31), 10-Q (reporting date: 2013-07-31), 10-Q (reporting date: 2013-04-30), 10-Q (reporting date: 2013-01-31).
1 Q3 2019 Calculation
ROA = 100
× (Net earningsQ3 2019
+ Net earningsQ2 2019
+ Net earningsQ1 2019
+ Net earningsQ4 2018)
÷ Total assets
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals notable trends in net earnings, total assets, and return on assets (ROA) over the observed periods.
- Net Earnings
- Net earnings exhibit considerable variability throughout the periods. Initially, earnings fluctuate around the range of 1,000 to 1,400 million US dollars between 2013 and early 2015. A significant decline is observed in early 2016, with earnings dropping near or below 600 million US dollars, followed by intermittent recoveries and decreases. The first quarter of 2018 stands out with an unusually high peak of 1,938 million US dollars, indicating a substantial gain relative to prior quarters. Subsequently, earnings moderate but remain volatile, moving between 700 and 1,400 million US dollars through mid-2019. This variability suggests fluctuating profitability possibly influenced by external market conditions or internal operational factors.
- Total Assets
- Total assets show a general declining trend from about 106,700 million US dollars in early 2013 to approximately 100,860 million US dollars by early 2015, indicating asset reduction or divestiture during this period. However, from early 2016 onward, the asset base appears to reset at a much lower level near 25,500 million US dollars and generally increases gradually, reaching approximately 32,400 million US dollars by mid-2019. This pattern suggests a structural change, potentially due to corporate restructuring, asset sales, or reclassification occurring around 2015-2016, followed by steady asset growth.
- Return on Assets (ROA)
- ROA data is unavailable for early periods but begins around 4.8% in early 2014, showing a mild upward trend near 5.3% by mid-2014, suggesting improving efficiency in asset utilization initially. A marked increase is observed from early 2016, where ROA jumps significantly to nearly 15%, reflecting higher profitability or improved asset management post restructuring indicated in asset trends. Thereafter, ROA maintains elevated levels ranging mostly between 7% and 15%, with some fluctuations. The particularly high ROA in early 2018 aligns with the peak in net earnings during the same period, confirming enhanced returns on the asset base during that quarter.
In summary, the data points to a period of relative stability in earnings and assets from 2013 to 2015, followed by a major transition around 2015-2016 with a substantial decline in total assets and a simultaneous increase in return on assets. The spike in net earnings and ROA in early 2018 represents a notable outlier, reflecting an exceptional performance quarter. Post-transition periods indicate recovery and gradual growth in asset size with improved profitability metrics, although earnings remain somewhat volatile. These trends highlight a significant organizational or operational shift influencing financial performance and asset management starting in mid-2015.