HP Inc. (HPQ)

Price to FCFE (P/FCFE)

Difficulty: Intermediate

HP Inc., FCFE calculation

USD $ in millions

	12 months ended	Oct 31, 2018	Oct 31, 2017	Oct 31, 2016	Oct 31, 2015	Oct 31, 2014	Oct 31, 2013
	Net earnings
	Net noncash charges
	Changes in operating assets and liabilities, net of acquisitions
	Net cash provided by operating activities
	Investment in property, plant and equipment
	Proceeds from sale of property, plant and equipment
	Proceeds from (payment of) short-term borrowings with original maturities less than 90 days, net
	Proceeds from short-term borrowings with original maturities greater than 90 days
	Proceeds from debt, net of issuance costs
	Payment of short term borrowings with original maturities greater than 90 days
	Payment of debt
	Free cash flow to equity (FCFE)

Item	Description	The company
FCFE	Free cash flow to equity is the cash flow available to HP Inc.’s equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made.	HP Inc.’s FCFE increased from 2016 to 2017 but then slightly declined from 2017 to 2018 not reaching 2016 level.

HP Inc., current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding
Selected Financial Data (USD $)
Free cash flow to equity (FCFE) (in millions)
FCFE per share
Current share price (P)
Ratio
P/FCFE
Benchmarks
P/FCFE, Competitors
Apple Inc.
Applied Materials Inc.
Broadcom Inc.
Cisco Systems Inc.
Intel Corp.
NVIDIA Corp.
Qualcomm Inc.
Texas Instruments Inc.
P/FCFE, Sector
Technology Hardware & Equipment
P/FCFE, Industry
Technology

If company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.

Otherwise, if company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.

HP Inc., historical P/FCFE calculation, comparison to benchmarks

		Oct 31, 2018	Oct 31, 2017	Oct 31, 2016	Oct 31, 2015	Oct 31, 2014	Oct 31, 2013
	No. shares of common stock outstanding¹
	Selected Financial Data (USD $)
	Free cash flow to equity (FCFE) (in millions)²
	FCFE per share⁴
	Share price^1, 3
	Ratio
	P/FCFE⁵
	Benchmarks
	P/FCFE, Competitors
	Apple Inc.
	Applied Materials Inc.
	Broadcom Inc.
	Cisco Systems Inc.
	Intel Corp.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	P/FCFE, Sector
	Technology Hardware & Equipment
	P/FCFE, Industry
	Technology

¹ Data adjusted for splits and stock dividends.

³ Close price on the filing date of HP Inc.’s Annual Report.

2018 Calculations

⁴ FCFE per share = FCFE ÷ No. shares of common stock outstanding
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⁵ P/FCFE = Share price ÷ FCFE per share
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Ratio	Description	The company
P/FCFE	Price to free cash flow to equity is cash valuation indicator of stockholders’ equity.	HP Inc.’s P/FCFE ratio declined from 2016 to 2017 but then slightly increased from 2017 to 2018.

	HP Inc.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

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Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality