Analysis of Reportable Segments
HP Inc. operates in 3 segments: Personal Systems; Printing; and Corporate Investments.
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
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Segment Profit Margin
HP Inc., profit margin by reportable segment
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | |
|---|---|---|---|---|---|---|
| Personal Systems | ||||||
| Printing | ||||||
| Corporate Investments |
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).
- Personal Systems Segment Profit Margin
- The profit margin for the Personal Systems segment exhibits moderate fluctuations over the observed period. Beginning at 2.96% in 2013, the margin increases to 3.7% in 2014, indicating initial improvement. Subsequently, a slight decline to 3.38% is noted in 2015, followed by a recovery to 3.83% in 2016. The margin dips slightly again to 3.63% in 2017 before rising to 3.75% in 2018. Overall, the segment maintains a relatively stable profit margin, remaining within a narrow range between approximately 3.3% and 3.8%, suggesting consistent but modest profitability.
- Printing Segment Profit Margin
- The Printing segment shows a clear downward trend in profit margin over the six-year span. Starting at 16.31% in 2013, the margin improves to a peak of 18.21% in 2014 and essentially stabilizes at 18.2% in 2015. However, from 2016 onwards, profitability recedes steadily, decreasing to 17.13% in 2016, 16.81% in 2017, and finally 15.97% in 2018. This gradual decline may reflect increasing pressures in the printing market or operational challenges affecting this segment's profitability.
- Corporate Investments Segment Profit Margin
- The Corporate Investments segment consistently reports significant negative profit margins throughout the period, indicating ongoing losses. The negative values are substantial and highly volatile, with no clear improvement trend. The margin starts at an extreme -983.33% in 2013, improves somewhat to -65.89% in 2014, but then deteriorates sharply to -2092.59% in 2015. Subsequent years show large negative figures again, with margins at -1400% in 2016, -1087.5% in 2017, and worsening to -1640% in 2018. These fluctuations and persistent losses suggest considerable financial challenges or write-downs associated with this segment.
Segment Profit Margin: Personal Systems
HP Inc.; Personal Systems; segment profit margin calculation
| 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 | ||||||
| Net revenue | ||||||
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | ||||||
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
Segment profit margin = 100 × Earnings from operations ÷ Net revenue
= 100 × ÷ =
- Net Revenue
- Net revenue exhibited fluctuations over the six-year period. Starting at 32,071 million US dollars in 2013, it increased to 34,303 million in 2014 before declining to 31,469 million in 2015 and further to 29,987 million in 2016. Subsequently, net revenue showed a recovery, rising to 33,374 million in 2017 and reaching the highest point of 37,661 million in 2018. Overall, despite some declines in the middle years, net revenue demonstrated a positive growth trend towards the end of the period.
- Earnings from Operations
- Earnings from operations followed a generally upward trajectory throughout the timeframe. Beginning at 949 million US dollars in 2013, earnings increased significantly to 1,270 million in 2014. There was a decrease in 2015 to 1,064 million, but subsequent years showed recovery and growth, with earnings reaching 1,150 million in 2016, 1,213 million in 2017, and peaking at 1,411 million in 2018. This suggests improving operational efficiency and profitability despite mid-period volatility.
- Segment Profit Margin
- The segment profit margin experienced moderate variability within a narrow range. It increased from 2.96% in 2013 to 3.7% in 2014, then declined slightly to 3.38% in 2015. After this dip, the margin improved again, achieving 3.83% in 2016, decreasing slightly to 3.63% in 2017, and rising once more to 3.75% in 2018. These fluctuations indicate that profitability as a percentage of revenue remained relatively stable with minor improvements over the years.
- Summary
- Overall, the segment demonstrated resilience with positive growth in both net revenue and earnings from operations by the end of the period analyzed. Despite some declines in revenue in the middle years, the segment managed to enhance its earnings and maintain a steady profit margin, reflecting effective cost management and operational performance improvements. The upward trend in earnings alongside a recovering and ultimately increasing revenue base indicates strengthening financial health within the segment over the six-year period.
Segment Profit Margin: Printing
HP Inc.; Printing; segment profit margin calculation
| 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 | ||||||
| Net revenue | ||||||
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | ||||||
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
Segment profit margin = 100 × Earnings from operations ÷ Net revenue
= 100 × ÷ =
The analysis of the annual data for the Printing segment over the six-year period reveals several notable trends in financial performance and operational efficiency.
- Earnings from Operations
- The earnings from operations exhibit a fluctuating trend. Beginning at 3,890 million USD in 2013, earnings increased to a peak of 4,185 million USD in 2014. Subsequently, there was a decline to 3,865 million USD in 2015 and a more pronounced drop to 3,128 million USD in 2016. In the last two years, earnings slightly recovered, reaching 3,161 million USD in 2017 and 3,323 million USD in 2018. Overall, earnings show a downward trend after 2014 with some recovery towards the end of the period.
- Net Revenue
- Net revenue presents a clear declining trend over the years, starting at 23,854 million USD in 2013 and decreasing steadily to 20,805 million USD by 2018. The most substantial drops occurred between 2014 (22,979 million USD) and 2016 (18,260 million USD). A slight increase is observed in 2017 and 2018, though revenue remains below the levels witnessed at the beginning of the period.
- Segment Profit Margin
- The segment profit margin fluctuates moderately, beginning at 16.31% in 2013. It rises to a peak of 18.21% in 2014, maintaining a similar level of 18.2% in 2015. Afterward, the margin decreases consistently each year, reaching 15.97% in 2018. Although the margin remains above 15% throughout, the trend indicates a reduction in profitability relative to net revenue over time.
In summary, the Printing segment experienced a decline in net revenue and operational earnings especially after 2014, with earnings showing signs of partial recovery from 2016 onwards. The segment profit margin peaked mid-period but gradually declined toward the end of the six years, reflecting a decrease in efficiency or increased costs relative to revenue. These patterns suggest challenges in sustaining revenue growth and profitability, despite some operational earnings stabilization in the later years.
Segment Profit Margin: Corporate Investments
HP Inc.; Corporate Investments; segment profit margin calculation
| 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 | ||||||
| Net revenue | ||||||
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | ||||||
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
Segment profit margin = 100 × Earnings from operations ÷ Net revenue
= 100 × ÷ =
- Earnings from operations
- The earnings from operations displayed a fluctuating but overall negative trend during the period observed. Initially, in 2013, the segment experienced a loss of $236 million, which slightly improved to a loss of $199 million in 2014. However, in 2015 there was a significant deterioration to a loss of $565 million, marking the lowest point in the period. After this substantial decline, losses decreased notably over the next three years, settling between $98 million and $82 million by 2018. This pattern suggests continued operational challenges but also some recovery or cost management efforts after 2015.
- Net revenue
- Net revenue figures were relatively low and exhibited some variability. Starting at $24 million in 2013, revenue increased to $302 million in 2014, representing a significant jump. However, from 2015 onward, revenues declined sharply, falling to $27 million in 2015, then further dropping to the single digits in subsequent years, with values of 7 million, 8 million, and 5 million from 2016 to 2018. This pattern indicates a decline in sales or other revenue-generating activities within this segment following a peak in 2014.
- Segment profit margin
- The segment profit margin remained negative throughout the timeline, indicating persistent losses relative to revenue. The margin was extremely poor in 2013 at -983.33%, improving somewhat in 2014 to -65.89%, coinciding with the revenue peak that year. However, in 2015, the margin plummeted drastically to -2092.59%, reflecting the sharp increase in operational losses relative to revenue. Subsequent years also showed very high negative margins, including -1400%, -1087.5%, and -1640%, which underscores ongoing profitability challenges within the segment despite fluctuations in earnings and revenues.
- Overall observations
- The segment consistently operated at a loss during the period covered, with a peak loss in 2015. The revenue trajectory peaked dramatically in 2014 but declined sharply thereafter, while profit margins worsened significantly in the same year and remained very unfavorable. The data suggests that operational inefficiencies or structural challenges affected financial performance, with some improvements in operating losses after 2015, but profitability remained elusive. The negative margin percentages indicate that the segment was unable to generate profits proportional to revenue at any point in the observed timeframe.
Segment Return on Assets (Segment ROA)
HP Inc., ROA by reportable segment
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | |
|---|---|---|---|---|---|---|
| Personal Systems | ||||||
| Printing | ||||||
| Corporate Investments |
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).
- Personal Systems Segment ROA
- The return on assets (ROA) for the Personal Systems segment demonstrated a generally positive trend from 2013 to 2018. Beginning at 7.99% in 2013, there was a steady increase reaching a peak of 11.16% in 2015. Following this peak, there was a slight decline to 10.76% in 2016 and a further decrease to 9.98% in 2017. However, the ROA rebounded slightly to 10.49% in 2018, indicating relatively stable and moderate profitability within this segment over the period.
- Printing Segment ROA
- The Printing segment exhibited a notable decline in ROA over the six-year period. The ROA was highest in 2014 at 41.59%, having increased from 36.34% in 2013 and further to 42.97% in 2015. From 2015 onward, the ROA experienced a consistent downward trend, falling to 31.41% in 2016, 29.97% in 2017, and reaching a low of 24.24% in 2018. This indicates diminishing returns and profitability challenges in the Printing segment during the latter years.
- Corporate Investments Segment ROA
- The Corporate Investments segment displayed significant negative ROA values throughout the entire time frame, indicating losses relative to asset base. The negative return worsened sharply from -191.87% in 2013 to -585.29% in 2014, and further to an extreme -1008.93% in 2015. The negative trend peaked at an extraordinary -9800% in 2016, followed by partial improvement to -2900% in 2017 and -1640% in 2018. Despite the improvement in the last two years, the ROA remained deeply negative, pointing to substantial inefficiencies or unprofitable investments within this segment.
Segment ROA: Personal Systems
HP Inc.; Personal Systems; segment ROA calculation
| 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 | ||||||
| Assets | ||||||
| Segment Profitability Ratio | ||||||
| Segment ROA1 | ||||||
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
Segment ROA = 100 × Earnings from operations ÷ Assets
= 100 × ÷ =
- Earnings from operations
- Over the six-year period, earnings from operations exhibited a generally positive trend. Starting at $949 million in 2013, earnings increased significantly to $1270 million in 2014. There was a decline in 2015, with earnings falling to $1064 million, followed by a recovery phase from 2016 through 2018. By 2018, earnings reached their highest point at $1411 million, representing sustained growth after the 2015 dip.
- Assets
- The asset base showed fluctuations within the timeframe. It began at $11,870 million in 2013 and rose slightly to $12,104 million in 2014. A notable decline occurred in 2015, with assets decreasing to $9,534 million. From 2016 onwards, assets increased steadily, reaching $13,447 million by 2018. This indicates a recovery and expansion in asset holdings in the latter years.
- Segment Return on Assets (ROA)
- The segment ROA percentage demonstrated relatively stable performance with some variability. It started at 7.99% in 2013 and improved to a peak of 11.16% in 2015, despite the drop in assets and operations earnings that year. Following 2015, ROA slightly declined but remained near or above 10% in most years, ending at 10.49% in 2018. This suggests an overall effective utilization of assets in generating earnings during the period.
- Overall Insights
- The data highlights a resilience in earnings and asset growth post-2015 downturn. The initial dip in both earnings and assets in 2015 may indicate external or internal challenges during that year, but subsequent recovery illustrates successful corrective measures. The steady ROA underscores effective asset management and operational efficiency across the analyzed timeframe.
Segment ROA: Printing
HP Inc.; Printing; segment ROA calculation
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings from operations | ||||||
| Assets | ||||||
| Segment Profitability Ratio | ||||||
| Segment ROA1 | ||||||
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
Segment ROA = 100 × Earnings from operations ÷ Assets
= 100 × ÷ =
The analysis of the “Printing” segment data over the six-year period reveals several notable trends in earnings, assets, and return on assets (ROA).
- Earnings from Operations
- Earnings from operations exhibited fluctuations throughout the period. Starting at $3,890 million in 2013, earnings increased modestly to reach a peak of $4,185 million in 2014. Following that peak, a downward trend emerged, with earnings declining to $3,865 million in 2015 and dropping further to $3,128 million in 2016. After 2016, earnings stabilized somewhat, showing slight increases to $3,161 million in 2017 and $3,323 million in 2018, but did not return to the earlier highs.
- Assets
- The asset base exhibited a different trend relative to earnings. Assets initially decreased from $10,705 million in 2013 to a low of $8,994 million in 2015. Subsequently, a recovery phase occurred, with assets increasing to $9,959 million in 2016 and continuing to grow steadily to $13,706 million by 2018, surpassing the initial value in 2013. This upward trend in assets from 2015 onward suggests increased investment or acquisition in the segment's asset base.
- Segment Return on Assets (ROA)
- Segment ROA showed a declining trend over the observed period. ROA started at 36.34% in 2013 and improved to peak at 42.97% in 2015, reflecting efficient use of assets during this mid-period. However, following 2015, ROA decreased sharply, falling to 31.41% in 2016 and continuing to decline to 24.24% by 2018. This indicates that despite the growth in assets after 2015, the segment’s efficiency in generating operating earnings from those assets diminished significantly.
In summary, the Printing segment experienced a peak in operating earnings and ROA around 2014-2015, followed by declines in both metrics. Conversely, the asset base decreased initially but then increased substantially from 2015 onward. The declining ROA in the face of rising assets suggests potential challenges in asset utilization or profitability within the segment during the latter years.
Segment ROA: Corporate Investments
HP Inc.; Corporate Investments; segment ROA calculation
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings from operations | ||||||
| Assets | ||||||
| Segment Profitability Ratio | ||||||
| Segment ROA1 | ||||||
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
Segment ROA = 100 × Earnings from operations ÷ Assets
= 100 × ÷ =
- Earnings from operations
- The earnings from operations display a fluctuating negative trend over the six-year period. Starting at -236 million USD in 2013, there was an improvement in 2014 to -199 million USD. However, a significant decline occurred in 2015, dropping to -565 million USD. Subsequently, the losses gradually decreased from 2016 through 2018, reaching -82 million USD in the final year. This suggests some recovery efforts or operational adjustments that have partially mitigated losses after the 2015 low point.
- Assets
- The asset base shows a notable reduction over the analyzed years. Beginning with 123 million USD in 2013, assets sharply diminished to 34 million USD in 2014, followed by some fluctuations between 1 and 56 million USD in the subsequent years. The asset values remain very low from 2016 to 2018, registering at 1, 3, and 5 million USD respectively, indicating a significant downsizing or divestiture of segment assets.
- Segment Return on Assets (ROA)
- The segment ROA reflects highly negative values throughout the period, indicating consistent and severe operational inefficiencies and losses relative to asset levels. The ROA deteriorated drastically from -191.87% in 2013 to an extreme of -9800% in 2016. While improving somewhat afterward, the trended values remain deeply negative, with -2900% in 2017 and -1640% in 2018. This pattern signals that the segment has persistently failed to generate positive returns on the assets employed, with the worst inefficiency corresponding to the lowest asset levels.
- Overall Analysis
- The data reveals a segment facing significant operational and financial challenges throughout the period. While operational losses tend to improve slightly after 2015, they remain consistently negative. The substantial reduction in asset base suggests a possible restructuring or downsizing strategy. Despite these efforts, the persistently negative and highly volatile ROA underscores continued inefficiency and lack of profitability. The correlation between asset reduction and worsening ROA, particularly in the middle years, indicates that asset contraction has not translated into improved return efficiency.
Segment Asset Turnover
HP Inc., asset turnover by reportable segment
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | |
|---|---|---|---|---|---|---|
| Personal Systems | ||||||
| Printing | ||||||
| Corporate Investments |
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).
- Personal Systems Segment Asset Turnover
- The Personal Systems segment exhibits relative stability with some fluctuations over the six-year period. Starting at 2.7 in 2013, the ratio slightly increased to 2.83 in 2014, followed by a notable rise to 3.3 in 2015. After this peak, the ratio declined to 2.81 in 2016 and moved lower to 2.75 in 2017, before a minor recovery to 2.8 in 2018. Overall, the asset turnover for this segment remains consistently within a narrow range, indicating steady operational efficiency in utilizing assets to generate revenue.
- Printing Segment Asset Turnover
- The Printing segment shows a downward trend in asset turnover over the period observed. Beginning at 2.23 in 2013, there is a slight increase to 2.28 in 2014 and a further incremental rise to 2.36 in 2015. However, a marked decline is evident from 2016 onward, with the ratio dropping significantly to 1.83 in 2016, decreasing further to 1.78 in 2017, and reaching a low of 1.52 in 2018. This downward trajectory suggests diminishing efficiency in this segment's asset utilization, potentially reflecting challenges or shifts in the market dynamics for Printing.
- Corporate Investments Segment Asset Turnover
- The Corporate Investments segment exhibits high volatility across the timeframe. Initially, it is very low at 0.2 in 2013, then dramatically spikes to 8.88 in 2014. Following this peak, the ratio sharply declines to 0.48 in 2015, then rises again to 7 in 2016. After 2016, the ratio decreases substantially to 2.67 in 2017 and further to 1 in 2018. The erratic pattern suggests that this segment experiences significant variations in asset turnover, possibly due to the nature of investments or accounting treatments affecting the reported figures. The high volatility indicates inconsistency in the efficiency with which assets are generating revenue in this segment.
- Summary
- In summary, the Personal Systems segment maintains a relatively stable and moderately high asset turnover, indicating consistent utilization of assets. The Printing segment reveals a clear downward trend, highlighting declining asset efficiency. The Corporate Investments segment is characterized by extreme fluctuations, reflecting instability and potentially irregular performance in asset turnover. These divergent patterns across segments suggest differing operational challenges and asset management effectiveness within the organization.
Segment Asset Turnover: Personal Systems
HP Inc.; Personal Systems; segment asset turnover calculation
| 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 revenue | ||||||
| Assets | ||||||
| Segment Activity Ratio | ||||||
| Segment asset turnover1 | ||||||
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
Segment asset turnover = Net revenue ÷ Assets
= ÷ =
The analysis of the "Personal Systems" reportable segment over the six-year period reveals noteworthy patterns in net revenue, assets, and segment asset turnover.
- Net Revenue
- The segment's net revenue exhibited some fluctuations during the period. Starting at $32,071 million in 2013, revenue increased to a peak of $34,303 million in 2014. This was followed by a decline in 2015 and 2016, reaching a low of $29,987 million. Thereafter, the revenue rebounded, climbing to $33,374 million in 2017 and further to $37,661 million in 2018, representing the highest revenue in the observed timeframe. Overall, despite mid-period declines, the segment showed a positive revenue growth trend by the end of the period.
- Assets
- Assets allocated to the segment experienced variability over the years. The asset base grew slightly from $11,870 million in 2013 to $12,104 million in 2014 but then contracted significantly to $9,534 million in 2015. A gradual recovery ensued over the next three years, with assets increasing to $10,686 million in 2016, $12,156 million in 2017, and $13,447 million in 2018. This suggests a strategic reassessment or reallocation of assets around 2015, followed by renewed investment or growth in subsequent years.
- Segment Asset Turnover
- The segment asset turnover ratio displayed a volatile yet generally stable trend. It improved from 2.7 in 2013 to 2.83 in 2014, reaching a peak of 3.3 in 2015, which was the highest turnover in the period and likely reflective of efficient utilization of a reduced asset base. However, the ratio decreased again to 2.81 in 2016 and remained relatively steady around 2.75 to 2.8 in 2017 and 2018, indicating consistent but slightly moderated asset efficiency following the peak.
In summary, the segment underwent a phase of contraction in both revenue and assets around 2015-2016, followed by recovery and growth toward 2018. The peak in asset turnover during 2015 indicates effective use of assets amid asset base reduction, with subsequent years showing balanced growth in both assets and revenue accompanied by stable turnover ratios. This pattern may imply operational adjustments and strategic realignments enhancing overall segment performance going forward.
Segment Asset Turnover: Printing
HP Inc.; Printing; segment asset turnover calculation
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net revenue | ||||||
| Assets | ||||||
| Segment Activity Ratio | ||||||
| Segment asset turnover1 | ||||||
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
Segment asset turnover = Net revenue ÷ Assets
= ÷ =
- Net Revenue
- The net revenue displays a downward trend from 2013 to 2016, decreasing from $23,854 million to $18,260 million. In 2017, a slight increase is observed, with revenue rising to $18,801 million, followed by a more notable recovery in 2018, reaching $20,805 million. Overall, net revenue exhibits an initial decline followed by a moderate rebound in the later years.
- Assets
- Assets follow a declining pattern between 2013 and 2015, dropping from $10,705 million to $8,994 million. However, starting in 2016, assets begin to rise, reaching $13,706 million by 2018. This indicates a rebound and expansion of asset base after a period of contraction.
- Segment Asset Turnover
- The segment asset turnover ratio shows a decreasing trend over the analyzed period. Beginning at 2.23 in 2013, it peaks slightly at 2.36 in 2015, then declines steadily to 1.52 in 2018. This suggests diminishing efficiency in utilizing assets to generate revenue, with asset growth outpacing revenue increases in the latter years.
- Overall Insights
- The data illustrates a print segment experiencing challenges during 2013 to 2016, characterized by declining revenue, asset base, and asset turnover efficiency. From 2016 onward, there is evidence of business recovery and expansion in assets, with net revenue also improving. Nonetheless, the asset turnover ratio decline implies that asset utilization efficiency has weakened, potentially pointing to a strategic emphasis on asset accumulation or changes in operational dynamics affecting productivity.
Segment Asset Turnover: Corporate Investments
HP Inc.; Corporate Investments; segment asset turnover calculation
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net revenue | ||||||
| Assets | ||||||
| Segment Activity Ratio | ||||||
| Segment asset turnover1 | ||||||
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
Segment asset turnover = Net revenue ÷ Assets
= ÷ =
The data reveals several notable trends across the six-year period ending October 31, 2018, in the analyzed segment.
- Net Revenue
- Net revenue figures fluctuate significantly. Starting at 24 million US dollars in 2013, there is a steep decline to 3 million in 2014, followed by a recovery to 27 million in 2015. Subsequently, the net revenue decreases sharply again to 7 million in 2016, with values rising moderately to 8 million in 2017 and 5 million in 2018. The pattern indicates considerable volatility without a consistent directional trend.
- Assets
- The asset base also shows variations, beginning at 302 million US dollars in 2013, decreasing to 34 million in 2014, and then increasing to 56 million in 2015. From 2016 onward, assets decline progressively, falling to 1 million in 2016, 3 million in 2017, and further slightly increasing to 5 million in 2018. This suggests a general reduction in asset holdings over the later years, following a sharp drop after 2013.
- Segment Asset Turnover Ratio
- The segment asset turnover ratio, which measures the efficiency of asset use to generate revenue, exhibits substantial irregularities. It starts at 0.2 in 2013, peaks at 8.88 in 2014, drops to 0.48 in 2015, rises again to 7 in 2016, then gradually declines to 2.67 in 2017 and 1 in 2018. The notable peaks in 2014 and 2016 suggest periods of heightened efficiency, while other years show reduced productivity.
Overall, the segment demonstrates high volatility in revenue and asset figures over the period. The asset turnover ratio's fluctuations imply changing operational efficiency, possibly influenced by the sharp asset reductions and revenue variability. The data indicate an unstable performance environment with no clear upward or downward trend sustained across the years.
Net revenue
HP Inc., net revenue by reportable segment
US$ in millions
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | |
|---|---|---|---|---|---|---|
| Personal Systems | ||||||
| Printing | ||||||
| Enterprise Group | ||||||
| Enterprise Services | ||||||
| Software | ||||||
| HP Financial Services | ||||||
| Corporate Investments | ||||||
| Total |
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).
- Personal Systems Segment Revenue
- The segment shows an overall increasing trend in net revenue from 2013 to 2018. Starting at $32,071 million in 2013, revenue peaked at $34,303 million in 2014, experienced a decline over the next two years to $29,987 million in 2016, but then rebounded sharply thereafter, reaching $37,661 million in 2018. This indicates a recovery and growth phase in the latter part of the period.
- Printing Segment Revenue
- This segment displays a consistent downward trend from 2013 to 2016, with revenues declining from $23,854 million to $18,260 million. However, from 2016 onwards, revenue showed signs of stabilization and moderate recovery, increasing to $20,805 million by 2018. Despite this improvement, the 2018 revenue remains below the 2013 level.
- Enterprise Group Segment Revenue
- Data is available only for the years 2013 to 2015, with relatively stable revenue figures around $27,800 million. There is no data for 2016 and subsequent years, thus trends after 2015 cannot be assessed for this segment.
- Enterprise Services Segment Revenue
- Similar to the Enterprise Group, available data covers 2013 to 2015 only. Revenues show a declining pattern from $23,520 million in 2013 to $19,806 million in 2015.
- Software Segment Revenue
- There is a gradual decline in software revenue from $3,913 million in 2013 to $3,458 million in 2015, the last year data is reported. This indicates a contraction or reduced contribution from the software segment during this timeframe.
- HP Financial Services Segment Revenue
- Reported revenue for this segment decreases steadily from $3,629 million in 2013 to $3,216 million in 2015. Post-2015 data is unavailable, so the trend beyond this period cannot be determined.
- Corporate Investments Segment Revenue
- Revenue in this category is minimal and relatively volatile over the six years, fluctuating between $5 million and $302 million with no clear trend. The highest value was recorded in 2014 ($302 million), while other years show amounts close to zero.
- Total Revenue
- Total net revenue shows a notable decline from 2013 to 2015, dropping from $115,194 million to $107,115 million. From 2016 onwards, data suggest a significant reduction in total revenue reported (approximate halving), with values reported as $48,254 million in 2016, increasing slightly to $58,471 million in 2018. This drastic decrease may be due to a change in reporting scope or business structure as segment data for certain groups is missing after 2015.
Earnings from operations
HP Inc., earnings from operations by reportable segment
US$ in millions
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | |
|---|---|---|---|---|---|---|
| Personal Systems | ||||||
| Printing | ||||||
| Enterprise Group | ||||||
| Enterprise Services | ||||||
| Software | ||||||
| HP Financial Services | ||||||
| Corporate Investments | ||||||
| Total |
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).
The analysis of segment earnings from operations over the six-year period reveals several notable trends and shifts in financial performance across the different business units.
- Personal Systems
- The Personal Systems segment exhibited a generally positive trend, increasing from $949 million in 2013 to $1,411 million in 2018. Despite a dip in 2015 to $1,064 million, the segment consistently recovered and expanded, indicating growing profitability and perhaps strengthened market position or operational efficiency in this area.
- Printing
- The Printing segment showed a declining trend overall, starting at $3,890 million in 2013 and decreasing to $3,323 million in 2018. There was a notable drop in 2016 to $3,128 million, followed by a slight recovery but still below the initial years. This suggests challenges in maintaining growth or sustaining earnings in printing operations over the period examined.
- Enterprise Group
- Data for the Enterprise Group was available only for the first three years, showing a gradual decrease from $4,301 million in 2013 to $3,981 million in 2015. The absence of data post-2015 may indicate restructuring or reclassification of this segment. The downward trend in this period reflects diminishing profitability or strategic shifts affecting this segment.
- Enterprise Services
- Enterprise Services earnings expanded significantly from $679 million in 2013 to $1,051 million in 2015, suggesting strong growth early on. However, no data is reported beyond 2015, which could imply segment discontinuation, integration into other segments, or reporting changes.
- Software
- Software segment earnings were relatively stable but showed a slight decline from $866 million in 2013 to $760 million in 2015. Similar to other enterprise-related segments, no data follow 2015, possibly due to organizational changes or reporting adjustments.
- HP Financial Services
- The HP Financial Services segment demonstrated a decreasing trend, with earnings declining from $399 million in 2013 to $349 million in 2015. The absence of further data after 2015 might be associated with changes in either the segment’s structure or reporting criteria.
- Corporate Investments
- Corporate Investments consistently recorded negative earnings, indicative of expenses or losses in this area. Despite fluctuations, the losses decreased from -$236 million in 2013 to -$82 million in 2018, suggesting improved cost control or reduced investment write-downs over time.
- Total Earnings
- Total earnings from operations saw a peak of $11,328 million in 2014, followed by a sharp decline to $4,180 million in 2016. Though there was a slight recovery to $4,652 million by 2018, total earnings remained significantly lower than the initial years. The steep decline in total earnings corresponds with the lack of data for several enterprise segments after 2015, implying possible segment consolidation or reporting changes that affected the aggregation of earnings.
Overall, the Personal Systems segment showed promising growth, whereas the Printing segment faced declining earnings. The enterprise-related segments exhibited strong performance early in the period but were absent from later data, suggesting restructuring or reporting modifications. The persistent losses in Corporate Investments reduced notably, benefiting the overall financial position. The total earnings trend reflects these segment dynamics alongside potential changes in reporting or organizational structure impacting the comparability across years.
Assets
HP Inc., assets by reportable segment
US$ in millions
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | |
|---|---|---|---|---|---|---|
| Personal Systems | ||||||
| Printing | ||||||
| Enterprise Group | ||||||
| Enterprise Services | ||||||
| Software | ||||||
| HP Financial Services | ||||||
| Corporate Investments | ||||||
| Corporate and unallocated assets | ||||||
| Total |
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).
The data reveals distinct patterns and shifts across several reportable segment assets over the presented periods.
- Personal Systems
- This segment shows a variable trend with a decrease in assets from 12,104 million USD in 2014 to 9,534 million USD in 2015, followed by a recovery and steady growth reaching 13,447 million USD by 2018. This suggests a temporary contraction with a subsequent expansion in assets in this segment.
- Printing
- The Printing segment exhibits a downward trend from 10,705 million USD in 2013 to a low of 8,994 million USD in 2015. After 2015, assets in this segment increased consistently, ultimately surpassing the initial figure and peaking at 13,706 million USD in 2018, indicating a significant rebound and growth.
- Enterprise Group
- Data is only available up to 2015, with a decline from 30,858 million USD in 2013 to 27,236 million USD in 2014, then a rise to 33,499 million USD in 2015. Subsequent periods lack reported values, limiting the analysis for later years.
- Enterprise Services
- Available data from 2013 to 2015 shows a decline from 15,229 million USD to 13,472 million USD between 2013 and 2014, followed by a modest recovery to 14,354 million USD in 2015. No data is provided for later years.
- Software
- The segment assets show a gradual decrease over the three reporting years from 11,868 million USD in 2013 to 11,226 million USD in 2015. Post-2015 data is unavailable.
- HP Financial Services
- There is an increase in asset values from 12,011 million USD in 2013 to 13,529 million USD in 2014, followed by a slight decline to 13,093 million USD in 2015. The absence of data for the years after 2015 restricts further analysis.
- Corporate Investments
- The assets in this category remain minimal throughout the period, fluctuating at low levels from 123 million USD in 2013 down to 5 million USD in 2018. This suggests a relatively minor and diminishing scale of investments in this category.
- Corporate and unallocated assets
- This category shows volatile fluctuations, initially rising from 13,012 million USD in 2013 to 16,126 million USD in 2015. Assets then sharply decline to 8,364 million USD in 2016, slightly recover to 10,206 million USD in 2017, and again fall to 7,464 million USD in 2018. This variability indicates unstable asset allocation or reclassification impacts within corporate and unallocated assets.
- Total
- The reported total assets drop dramatically from 106,882 million USD in 2015 to 29,010 million USD in 2016, then show moderate increases to 32,913 million USD in 2017 and 34,622 million USD in 2018. This drastic decline between 2015 and 2016 likely reflects a change in reporting scope or segment classification rather than an actual decrease in asset base.