Hewlett Packard Enterprise Co. (NYSE:HPE)

The financial data reveals several noteworthy trends regarding the company's operational efficiency, liquidity, leverage, profitability, and returns over the six-year period ending October 31, 2023.

Asset Turnover

The reported total asset turnover ratio maintained a steady but slightly declining trajectory from 0.56 in 2018 and 2019 to a low of 0.48 in 2021, before recovering marginally to 0.51 by 2023. The adjusted total asset turnover exhibits a similar pattern, declining from 0.55 in 2018 and 2019 to 0.5 in 2021, then improving gradually to 0.54 in 2023. This indicates a modest decrease in asset utilization efficiency in the earlier years followed by incremental improvement.

Current Ratio (Liquidity)

The reported current ratio shows some volatility, declining from 1.00 in 2018 to 0.79 in 2019, then increasing to a peak of 0.91 in 2021 before slightly tapering off to 0.87 in 2023. The adjusted current ratio presents a consistently higher level than the reported figures and depicts a similar trend: a dip to 0.98 in 2019, a rise to 1.13 in 2020, and stabilization around 1.06 in 2022 and 2023. Overall, liquidity improved after 2019 but has somewhat stabilized just above 1.0 in recent years, indicating adequate short-term financial health.

Debt Ratios

Both reported and adjusted debt to equity ratios rose significantly from 0.57 and 0.60 respectively in 2018 to their peaks in 2020 at 0.99 and 0.79, suggesting increased leverage during this period. Subsequently, these ratios decreased steadily through 2023, with reported and adjusted figures falling to 0.58 and 0.50 respectively, reflecting a strategic reduction of leverage. A parallel trend is observed in debt to capital ratios, which showed a gradual increase reaching 0.50 reported and 0.44 adjusted in 2020, then declining to 0.37 and 0.34 by 2023. This indicates strengthened capital structure and reduced reliance on debt financing after 2020.

Financial Leverage

The reported financial leverage ratio increased from 2.61 in 2018 to a peak of 3.37 in 2020, indicating greater use of debt or other financial obligations relative to equity. However, it declined to 2.7 by 2023. The adjusted leverage ratio follows a similar path, rising from 2.20 in 2018 to 2.42 in 2020 and then decreasing to 2.05 by 2023. The downward movement post-2020 suggests a deliberate effort to lower financial risk.

Profit Margin

There are fluctuations in profitability over the period. Reported net profit margin declined sharply from 6.18% in 2018 to a negative margin of -1.19% in 2020, followed by a recovery to 12.33% in 2021. Afterward, it dropped to 3.05% in 2022 and rebounded to 6.95% in 2023. The adjusted net profit margin shows a similar pattern with a deeper negative margin (-1.37%) in 2020 and a higher recovery peak (15.39%) in 2021, though it remained lower in 2022 and improved in 2023. The volatility suggests operational challenges around 2020 followed by strong recovery and some stabilization.

Return on Equity (ROE)

ROE figures mirror the trend seen in net profit margins. Reported ROE declined from 8.98% in 2018 to a negative value of -2.01% in 2020, then surged to 17.16% in 2021, declining again to 4.37% in 2022 and rising to 9.56% in 2023. Adjusted ROE follows a similar pattern but with less pronounced negative and positive extremes. The drop in 2020 reflects a temporary setback, with strong recovery and moderate growth in subsequent years.

Return on Assets (ROA)

The reported ROA decreased from 3.44% in 2018 to -0.60% in 2020, then rebounded to 5.94% in 2021, decreased to 1.52% in 2022, and climbed again to 3.54% by 2023. Adjusted ROA, with a slightly higher baseline, shows a similar pattern: a decline to -0.71% in 2020, recovery to 7.72% in 2021, a dip to 0.73% in 2022, and an increase to 4.50% in 2023. These movements reflect variations in asset profitability that correspond closely with the company's overall performance cycles.

In summary, the company experienced a period of financial strain around 2020, indicated by declines in profitability, returns, and increased leverage. Subsequent years show recovery and strategic deleveraging combined with improved liquidity and asset utilization efficiency. The financial metrics suggest adjustment and stabilization in recent periods, with profitability and returns recovering toward healthier levels, but still subject to some fluctuations.

Net Revenue

Net revenue displayed a declining trend from 2018 through 2020, decreasing from $30,852 million to $26,982 million. Following this period, a slight recovery occurred in 2021, with revenue increasing to $27,784 million, and continued to rise modestly through 2023, reaching $29,135 million. Overall, the net revenue experienced a dip followed by a gradual upward trend in recent years.

Total Assets

Total assets showed a decreasing trend from 2018 ($55,493 million) to 2019 ($51,803 million), but rebounded to $54,015 million in 2020. From 2020 onwards, total assets increased further, peaking at $57,699 million in 2021 before slightly declining to $57,123 million in 2022 and stabilizing near this level at $57,153 million in 2023. The general pattern indicates some volatility with an overall upward movement after 2019.

Reported Total Asset Turnover

The reported total asset turnover ratio was stable at 0.56 in 2018 and 2019, then declined to 0.50 in 2020 and further to 0.48 in 2021, indicating reduced efficiency in generating revenue from assets. In 2022 and 2023, the ratio experienced a modest rebound to 0.50 and 0.51 respectively, suggesting a slight improvement in asset utilization.

Adjusted Net Revenue

Adjusted net revenue followed a similar trajectory to reported net revenue, decreasing from $31,060 million in 2018 to $27,212 million in 2020, before increasing steadily through 2023, ultimately reaching $29,668 million. This trend confirms the initial decline and subsequent recovery seen in reported figures while showing slightly higher values likely due to adjustments.

Adjusted Total Assets

Adjusted total assets decreased from $56,518 million in 2018 to $52,283 million in 2020, followed by an increase to $55,699 million in 2021. Although adjusted assets declined slightly to $55,021 million in 2022 and to $54,926 million in 2023, these figures remained relatively stable relative to earlier years, reflecting only modest asset base fluctuations post-2020.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio mirrored the reported ratio but exhibited slightly lower values. It remained at 0.55 in 2018 and 2019, dropped to 0.52 in 2020, then declined to 0.50 in 2021. A subsequent increase occurred in 2022 and 2023, reaching 0.52 and 0.54 respectively, indicating improved efficiency in recent periods.

Current Assets

Current assets showed a fluctuating trend over the analyzed period. Initially, there was a decline from US$17,272 million in 2018 to US$15,143 million in 2019, followed by a recovery and growth to a peak of US$20,506 million in 2022. However, in 2023, current assets contracted to US$18,948 million, indicating a slight reduction compared to the previous year.

Current Liabilities

Current liabilities exhibited a generally increasing trend from US$17,198 million in 2018 to US$23,174 million in 2022, with a subsequent decrease to US$21,882 million in 2023. This pattern suggests increased short-term obligations over the years, with some recent easing.

Reported Current Ratio

The reported current ratio started at 1.00 in 2018 but then consistently remained below 1.00 each year through 2023, ranging from 0.79 to 0.91 before settling near 0.87 in the latest period. This indicates that, on a reported basis, current liabilities exceeded current assets, suggesting tighter liquidity conditions throughout the period.

Adjusted Current Assets

Adjusted current assets slightly differed from reported current assets but followed a similar trend. Beginning at US$17,311 million in 2018, the figures declined to approximately US$15,174 million in 2019, then improved gradually up to US$20,531 million in 2022, with a small decline thereafter to US$18,985 million in 2023.

Adjusted Current Liabilities

Adjusted current liabilities showed a comparable trend to reported current liabilities but at noticeably lower levels. The values rose from US$13,486 million in 2018 to US$19,339 million in 2022, before reducing to US$17,877 million in 2023, indicating an upward trajectory in obligations but with some recent improvement.

Adjusted Current Ratio

The adjusted current ratio suggests generally stronger liquidity compared to the reported ratio, beginning at 1.28 in 2018, dropping to 0.98 in 2019, and rebounding above 1.00 in the following years up to 2021. Subsequently, the ratio declined slightly to 1.06 in both 2022 and 2023, reflecting a relatively stable but moderate liquidity position in recent years.

Overall Insights

The data indicate that the company experienced some liquidity pressure from 2018 through 2019, with current ratios below 1.00. Adjusted measures reveal stronger liquidity positions than reported figures, suggesting that certain liabilities might have been reclassified or accounted for differently. The rising current liabilities over time indicate growing short-term obligations, partially offset by increases in current assets. The adjusted current ratio's stability around 1.06 in the last two periods points to a modestly comfortable liquidity buffer, although the reported current ratio below 1.00 indicates caution in liquidity assessment.

Total Debt

Total debt increased steadily from 2018 through 2020, rising from $12,141 million to a peak of $15,941 million. After this, the debt decreased notably in 2021 to $13,448 million and continued a gradual decline through 2023, ending at $12,355 million.

Total HPE Stockholders’ Equity

Stockholders’ equity showed a declining trend from 2018 to 2020, dropping from $21,239 million to $16,049 million. However, beginning in 2021, equity rebounded strongly, increasing to $19,971 million and stabilizing around $21,000 million by 2023.

Reported Debt to Equity Ratio

The reported debt-to-equity ratio rose significantly from 0.57 in 2018 to a high of 0.99 in 2020, driven by the simultaneous increase in debt and decline in equity. From 2021 onwards, this ratio decreased markedly to 0.58 in 2023, reflecting reduced debt levels and recovering equity.

Adjusted Total Debt

The adjusted total debt followed a similar pattern to reported debt, increasing from $15,530 million in 2018 to a peak of $17,169 million in 2019 and remaining elevated at $17,027 million in 2020. It then declined to $14,578 million in 2021 and decreased slightly further, leveling off around $13,515 million by 2023.

Adjusted Total Stockholders’ Equity

Adjusted equity declined between 2018 and 2020, falling from $25,685 million to $21,620 million. A recovery phase started in 2021, with equity rising to $25,508 million and continuing upward to $26,774 million in 2023, indicating improved capitalization.

Adjusted Debt to Equity Ratio

This ratio increased from 0.60 in 2018 to 0.79 in 2020, reflecting increased adjusted debt and reduced equity. From 2021, a downward trend became evident, with the ratio decreasing to 0.50 by 2023, signifying a strengthening equity base relative to debt obligations.

The financial data displays trends in the company's debt, capital, and leverage ratios over a six-year period from 2018 to 2023.

Total Debt

Total debt showed an overall increasing trend from 2018 through 2020, rising from approximately 12.1 billion US dollars to a peak of about 15.9 billion US dollars. Subsequently, total debt declined steadily over the next three years, reaching around 12.4 billion US dollars by 2023, nearing the levels observed in 2018.

Total Capital

Total capital fluctuated within a relatively narrow range during the period. It started at approximately 33.4 billion US dollars in 2018, declined until 2019 reaching about 30.9 billion, then showed a moderate recovery with increases in 2020 and 2021, peaking at around 33.4 billion US dollars again in 2021. A slight decline followed in 2022, with a rebound in 2023 to approximately 33.5 billion US dollars, the highest level in the timeframe.

Reported Debt to Capital Ratio

The ratio initially increased from 0.36 in 2018 to a peak of 0.50 in 2020, indicating a rising proportion of debt relative to capital during the initial years. After 2020, there was a marked decrease in the ratio, falling to 0.37 by 2023, which suggests an improvement in the capital structure with reduced reliance on debt relative to capital towards the end of the period.

Adjusted Total Debt

Adjusted total debt followed a similar pattern to the reported total debt but at higher absolute values. It rose steadily from about 15.5 billion US dollars in 2018 to a peak of approximately 17.2 billion in 2019, remaining elevated in 2020. Afterwards, it decreased over the following three years, stabilizing around 13.5 billion US dollars in 2023.

Adjusted Total Capital

Adjusted total capital showed a general downward trend from 2018 to 2020, reducing from 41.2 billion to about 38.6 billion US dollars. A recovery trend followed, with figures increasing from 2021 onwards to 40.3 billion US dollars in 2023, though the level remained below that of 2018.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio rose from 0.38 in 2018 to a peak of 0.44 in 2020, indicating increased leverage. Post-2020, the ratio declined consistently, reaching 0.34 by 2023, reflecting a reduction in debt relative to capital on an adjusted basis and an improvement in financial leverage and risk profile over the latter part of the period.

The financial data over the six-year period indicates several notable trends in asset levels, equity, and leverage ratios.

Total Assets

Total assets experienced a decline from 2018 to 2019, decreasing from 55,493 million US dollars to 51,803 million US dollars. This was followed by a gradual recovery, reaching a peak of 57,699 million US dollars in 2021. Subsequently, total assets slightly declined again, stabilizing around 57,153 million US dollars by 2023.

Total HPE Stockholders’ Equity

Stockholders’ equity shows a downward trend from 21,239 million dollars in 2018 to a low point of 16,049 million dollars in 2020. After this trough, equity increased substantially in 2021 to 19,971 million dollars and remained relatively stable around 21,182 million dollars in 2023, nearly recovering to the 2018 level.

Reported Financial Leverage (Ratio)

The reported financial leverage ratio rose steadily from 2.61 in 2018 to a peak of 3.37 in 2020, indicating increased reliance on debt relative to equity. Following 2020, the ratio declined, moving down to 2.7 by 2023, suggesting a reduction in financial risk or deleveraging efforts.

Adjusted Total Assets

The adjusted total assets follow a pattern similar to the reported total assets, with a decline from 56,518 million in 2018 to 52,283 million in 2020. Thereafter, adjusted assets rose again to around 55,699 million in 2021, before a slight decrease to 54,926 million in 2023. Overall, adjusted assets remained relatively stable post-2020.

Adjusted Total Stockholders’ Equity

Adjusted equity declined from 25,685 million in 2018 to 21,620 million in 2020, mirroring trends seen in reported equity. This was followed by an increase reaching 25,774 million in 2023, exceeding the 2018 level and indicating equity strengthening on an adjusted basis.

Adjusted Financial Leverage (Ratio)

The adjusted leverage ratio increased from 2.2 in 2018 to 2.42 in 2020, showing a moderate increase in leverage. There was a consistent decrease afterward, with the ratio declining to 2.05 by 2023, signaling a beneficial trend towards lower leverage and potentially reduced financial risk.

Overall, the period from 2018 to 2020 is characterized by declining assets and equity alongside increasing leverage ratios, indicating heightened financial risk or increased debt usage. Post-2020, there is a recovery in equity and a reduction in leverage ratios, suggesting improved financial stability and a deleveraging strategy. Adjusted figures confirm these trends with a slightly more conservative assessment of equity strength and leverage reduction by 2023.

The financial data demonstrates notable fluctuations in profitability and revenue figures over the examined periods. Net earnings attributable to the company exhibited considerable variability, with a peak of 3,427 million US dollars in 2021 following a loss in 2020. The net earnings decreased significantly in 2019 compared to 2018, then showed a sharp decline to negative territory in 2020 before recovering strongly in 2021. Subsequent years saw a reduction in net earnings from the peak but maintained positive results through 2023.

Net revenue reflected a broadly declining trend from 2018 to 2020, falling from 30,852 million to 26,982 million US dollars. This was followed by a gradual increase in the years 2021 to 2023, reaching 29,135 million US dollars by the end of the period, close to the 2019 level.

The reported net profit margin varied significantly, starting at 6.18% in 2018 and decreasing sharply to negative 1.19% in 2020, corresponding with the period of net loss. A strong rebound occurred in 2021, with a notable margin of 12.33%, before declining again to 3.05% in 2022 and recovering to 6.95% in 2023. This pattern aligns with the fluctuations observed in net earnings.

Adjusted net earnings mirrored the trends of reported net earnings but with differences in magnitude. The adjusted figures were 1,842 million US dollars in 2018 and dropped to a loss of 373 million in 2020, followed by a peak of 4,301 million in 2021. The subsequent period saw a sharp decline to 404 million in 2022, but a recovery to 2,474 million in 2023. This suggests considerable one-time items or adjustments influencing reported earnings in certain years.

Adjusted net revenue followed a trend similar to net revenue, with an initial decline from 31,060 million US dollars in 2018 to 27,212 million in 2020, then a steady increase reaching 29,668 million in 2023. Adjusted net profit margin exhibited volatility, with a reduction to negative 1.37% in 2020 followed by a strong rise to 15.39% in 2021, then a steep fall to 1.42% in 2022, and a recovery to 8.34% in 2023.

Summary of Key Trends

Both reported and adjusted earnings suffered a significant downturn in 2020, followed by a notable recovery in 2021. Profits then moderated but remained positive.

Revenue experienced a decline up to 2020 with a gradual recovery thereafter.

Profit margins were highly variable, reflecting the swings in earnings, with particularly strong margins in 2021 before a decline and partial recovery by 2023.

Adjusted figures highlight the impact of non-recurring items, indicating volatility in core profitability despite relatively stable revenue trends in recent years.

The financial data over the periods from 2018 to 2023 exhibit notable fluctuations in profitability and shareholder equity measures. Net earnings attributable to the company experienced significant volatility, starting at $1,908 million in 2018, decreasing sharply to $1,049 million in 2019, and turning negative to a loss of $322 million in 2020. Thereafter, earnings rebounded strongly to $3,427 million in 2021 but then declined to $868 million in 2022 before increasing again to $2,025 million in 2023.

Total stockholders’ equity demonstrated a downward trend between 2018 and 2020, decreasing from $21,239 million to $16,049 million. However, it recovered from 2021 onwards, reaching $21,182 million in 2023, nearly regaining its 2018 level. Adjusted total stockholders’ equity followed a similar pattern but at higher absolute values, beginning at $25,685 million in 2018, declining to $21,620 million in 2020, and then rising steadily to $26,774 million by 2023.

Regarding return on equity (ROE), the reported ROE decreased consistently from 8.98% in 2018 to 6.14% in 2019 and turned negative at -2.01% in 2020, reflecting the net losses recorded that year. A sharp recovery occurred in 2021, with ROE climbing to 17.16%, followed by a reduction to 4.37% in 2022 and an increase to 9.56% in 2023. Adjusted ROE exhibited comparable trends, moving from 7.17% in 2018 up slightly to 7.36% in 2019, dipping below zero (-1.73%) in 2020, sharply rising to 16.86% in 2021, declining to 1.61% in 2022, and climbing back to 9.24% in 2023.

The adjusted net earnings mirrored the pattern of reported net earnings but showed less pronounced negative values during the down years, indicating the impact of adjustments that mitigate volatile or non-recurring effects. The recovery post-2020 was more substantial in adjusted figures, peaking at $4,301 million in 2021 before falling to $404 million in 2022 and recovering to $2,474 million in 2023.

Profitability Trends

The data reveals significant earnings volatility with a notable loss in 2020 followed by strong recoveries and some subsequent fluctuations. Adjusted earnings and ROE values suggest that underlying operational performance may have been more stable than indicated by the reported figures alone.

Equity Position

Stockholders’ equity declined notably through 2020, likely impacted by net losses and other factors, but improved progressively thereafter. Adjusted equity figures remained consistently higher than reported, indicative of adjustments that exclude certain liabilities or include additional valuation elements.

Return on Equity

Both reported and adjusted ROE reflected the earnings volatility, showing negative returns during the loss-making period in 2020 and strong rebounds in 2021, followed by moderate fluctuations in the two subsequent years. The gap between reported and adjusted ROE highlights the influence of adjustments on profitability measurement.

Overall Insights

The period examined was marked by financial instability with a significant downturn in 2020, followed by strong recovery. The adjusted metrics suggest that caution is warranted when interpreting raw earnings and equity data as adjustments can have a material effect on perceived performance. Recovery in stockholders’ equity and ROE after 2020 indicates improved financial health and profitability moving into recent years.

Net Earnings (Loss) Attributable to HPE

Net earnings exhibited notable volatility over the periods. Initially, earnings declined from 1,908 million USD in 2018 to 1,049 million USD in 2019, followed by a significant loss of 322 million USD in 2020. Recovery commenced in 2021 with a substantial increase to 3,427 million USD, then declined to 868 million USD in 2022 before increasing again to 2,025 million USD in 2023. This pattern indicates considerable fluctuations, with a pronounced rebound post-2020 loss.

Total Assets

Total assets showed a moderate downward trend from 55,493 million USD in 2018 to 51,803 million USD in 2019, then increased to a peak of 57,699 million USD in 2021. Subsequently, assets slightly decreased to 57,123 million USD in 2022 and remained nearly constant at 57,153 million USD in 2023. Overall, asset levels trended upward after 2019, stabilizing in the latest periods.

Reported Return on Assets (ROA)

The reported ROA mirrored the net earnings trend with an initial decline from 3.44% in 2018 to 2.02% in 2019, dipping further into negative territory at -0.6% in 2020. A significant increase occurred in 2021, reaching 5.94%, followed by a decrease to 1.52% in 2022 and a recovery to 3.54% in 2023. These fluctuations reflect variability in earnings relative to asset base efficiency.

Adjusted Net Earnings (Loss)

Adjusted net earnings followed a similar pattern to reported net earnings but with less extreme fluctuations. Beginning at 1,842 million USD in 2018, declining to 1,660 million USD in 2019, and turning negative at -373 million USD in 2020, adjusted earnings then sharply increased to 4,301 million USD in 2021. In 2022, adjusted earnings declined substantially to 404 million USD, then recovered to 2,474 million USD in 2023. These results indicate an overall recovery post-2020 with considerable variability.

Adjusted Total Assets

Adjusted total assets demonstrate a declining trend from 56,518 million USD in 2018 to 52,283 million USD in 2020, followed by a rebound to 55,699 million USD in 2021. Thereafter, assets slightly decreased and stabilized around 55,000 million USD in 2022 and 2023. This pattern suggests asset optimization or restructuring activity in the earlier years, stabilizing in recent periods.

Adjusted Return on Assets (ROA)

Adjusted ROA moved from 3.26% in 2018 to 3.09% in 2019, then dropped to -0.71% in 2020. A strong recovery to 7.72% was seen in 2021, followed by a sharp decline to 0.73% in 2022 and a partial rebound to 4.5% in 2023. These shifts highlight considerable changes in profitability adjusted for various factors in relation to assets, indicating enhanced performance in 2021 and notable volatility afterward.