Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
HP Inc., profitability 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).
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | HP Inc. gross profit margin ratio deteriorated from 2016 to 2017 and from 2017 to 2018. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | HP Inc. operating profit margin ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | HP Inc. net profit margin ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
| Profitability ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | HP Inc. ROA deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
Gross Profit Margin
HP Inc., gross profit margin 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) | |||||||
| Gross profit | 10,669) | 9,578) | 8,998) | 24,759) | 26,615) | 25,918) | |
| Net revenue | 58,472) | 52,056) | 48,238) | 103,355) | 111,454) | 112,298) | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 18.25% | 18.40% | 18.65% | 23.96% | 23.88% | 23.08% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Apple Inc. | — | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | — | — | — | — | — | — | |
| Super Micro Computer Inc. | 12.80% | — | — | — | — | — | |
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
Gross profit margin = 100 × Gross profit ÷ Net revenue
= 100 × 10,669 ÷ 58,472 = 18.25%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | HP Inc. gross profit margin ratio deteriorated from 2016 to 2017 and from 2017 to 2018. |
Operating Profit Margin
HP Inc., operating profit margin 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) | |||||||
| Earnings from operations | 4,064) | 3,519) | 3,549) | 5,471) | 7,185) | 7,131) | |
| Net revenue | 58,472) | 52,056) | 48,238) | 103,355) | 111,454) | 112,298) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 6.95% | 6.76% | 7.36% | 5.29% | 6.45% | 6.35% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Apple Inc. | — | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | — | — | — | — | — | — | |
| Super Micro Computer Inc. | 2.82% | — | — | — | — | — | |
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
Operating profit margin = 100 × Earnings from operations ÷ Net revenue
= 100 × 4,064 ÷ 58,472 = 6.95%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | HP Inc. operating profit margin ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |
Net Profit Margin
HP Inc., net profit margin 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) | |
| Net revenue | 58,472) | 52,056) | 48,238) | 103,355) | 111,454) | 112,298) | |
| Profitability Ratio | |||||||
| Net profit margin1 | 9.11% | 4.85% | 5.17% | 4.41% | 4.50% | 4.55% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Apple Inc. | — | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | — | — | — | — | — | — | |
| Super Micro Computer Inc. | 1.37% | — | — | — | — | — | |
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
Net profit margin = 100 × Net earnings ÷ Net revenue
= 100 × 5,327 ÷ 58,472 = 9.11%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | HP Inc. net profit margin ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
Return on Equity (ROE)
HP Inc., ROE 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) | |
| Total HP stockholders’ equity (deficit) | (639) | (3,408) | (3,889) | 27,768) | 26,731) | 27,269) | |
| Profitability Ratio | |||||||
| ROE1 | — | — | — | 16.40% | 18.75% | 18.75% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Apple Inc. | — | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | — | — | — | — | — | — | |
| Super Micro Computer Inc. | 5.47% | — | — | — | — | — | |
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
ROE = 100 × Net earnings ÷ Total HP stockholders’ equity (deficit)
= 100 × 5,327 ÷ -639 = —
2 Click competitor name to see calculations.
Return on Assets (ROA)
HP Inc., ROA 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) | |
| Total assets | 34,622) | 32,913) | 29,010) | 106,882) | 103,206) | 105,676) | |
| Profitability Ratio | |||||||
| ROA1 | 15.39% | 7.67% | 8.60% | 4.26% | 4.86% | 4.84% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Apple Inc. | — | — | — | — | — | — | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | — | — | — | — | — | — | |
| Super Micro Computer Inc. | 2.61% | — | — | — | — | — | |
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
ROA = 100 × Net earnings ÷ Total assets
= 100 × 5,327 ÷ 34,622 = 15.39%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | HP Inc. ROA deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |