Hewlett Packard Enterprise Co. (NYSE:HPE)

Current Ratio

The current ratio exhibited a declining trend from 1.00 in 2018 to 0.79 in 2019, indicating a decrease in short-term liquidity. Subsequently, it experienced gradual improvement, reaching 0.91 in 2021, before slightly decreasing again to 0.87 by 2023. Overall, the ratio remained below 1.0 for most of the latter years, suggesting that current liabilities consistently exceeded current assets, which may point to potential liquidity constraints.

Quick Ratio

The quick ratio showed a downward trend from 0.67 in 2018 to 0.54 in 2019, reflecting a reduction in the company's liquid assets relative to current liabilities. A modest recovery occurred in 2020 and 2021, with values reaching 0.61 and 0.58 respectively, yet a decline resumed with ratios of 0.51 in 2022 and a slight increase to 0.52 in 2023. These figures indicate relatively low immediate liquidity, with a consistent shortfall in assets that can be quickly converted into cash without relying on inventory sales.

Cash Ratio

The cash ratio decreased from 0.28 in 2018 to 0.20 in 2019, signifying a reduction in the cash and cash equivalents available to cover current liabilities. Over the following years, the ratio mostly remained stable around 0.18 to 0.23, dropping to 0.18 in 2022 and marginally improving to 0.20 in 2023. The consistent low values suggest limited cash reserves, indicating the company may depend on other short-term assets or financing to meet immediate obligations.

Current Assets

The current assets demonstrated variability over the six-year period. Starting at $17,272 million in 2018, there was a decline to $15,143 million in 2019. Subsequently, the current assets experienced a moderate increase, peaking at $20,506 million in 2022, before contracting to $18,948 million in 2023. The overall trend indicates some recovery and growth after the initial dip in 2019, with fluctuations observed in the latter years.

Current Liabilities

Current liabilities presented a generally upward trajectory throughout the period. Beginning at $17,198 million in 2018, they rose steadily each year, reaching a high of $23,174 million in 2022. In 2023, a slight reduction to $21,882 million was noted, though liabilities remained significantly elevated compared to the initial year. This trend reflects increasing short-term obligations over time, with a minor easing at the end of the period.

Current Ratio

The current ratio exhibited a declining trend, indicative of compressing liquidity. Initially at a neutral level of 1.00 in 2018, it decreased sharply to 0.79 in 2019. Minor improvements followed, with ratios of 0.88 in 2020, 0.91 in 2021, and then decreased again to 0.88 in 2022 and 0.87 in 2023. Despite some fluctuations, the ratio consistently stayed below 1 from 2019 onwards, implying that current liabilities have surpassed current assets, signaling potential challenges in meeting short-term obligations without additional financing.

The analysis of the provided financial data reveals the following trends:

Total quick assets

The total quick assets exhibited fluctuations over the years. Initially, in 2018, the value was 11,539 million US dollars. There was a decline in 2019 to 10,282 million US dollars, followed by an increase in 2020 to 11,413 million US dollars. Subsequently, there was a steady but slight rising trend in 2021 and 2022, reaching 11,907 million and 11,786 million US dollars respectively. In 2023, the value declined again to 11,294 million US dollars, indicating some volatility in liquid asset availability.

Current liabilities

Current liabilities showed a consistent upward trend from 2018 through 2022. Starting at 17,198 million US dollars in 2018, liabilities increased annually to reach 23,174 million US dollars by 2022. However, in 2023, there was a moderate decrease to 21,882 million US dollars, which may suggest some efforts to reduce short-term obligations.

Quick ratio

The quick ratio, a measure of short-term liquidity, declined from 0.67 in 2018 to a low point of 0.51 in 2022, indicating a deterioration in the company's ability to cover current liabilities with quick assets. In 2023, the ratio marginally improved to 0.52 but remains below earlier levels. This pattern suggests ongoing challenges in maintaining strong liquidity relative to current liabilities.

Overall, the data reflect a scenario where quick assets have not grown proportionally to the increase in current liabilities over the period, leading to a weakening liquidity position as indicated by the declining quick ratio. The slight improvement in 2023 may be an early sign of stabilization but does not fully reverse the downward trend observed in liquidity.

Total cash assets

The total cash assets exhibit fluctuations over the six-year period. Starting at 4,880 million USD in 2018, there was a decline to 3,753 million USD in 2019, followed by a recovery to 4,233 million USD in 2020. Subsequently, cash assets decreased slightly in 2021 to 3,996 million USD but increased again in 2022 and 2023 to 4,163 million USD and 4,270 million USD, respectively. Overall, the cash holdings demonstrate variability with a tendency to stabilize between 4,000 and 4,300 million USD in recent years.

Current liabilities

Current liabilities show a general upward trend from 17,198 million USD in 2018 to a peak of 23,174 million USD in 2022. Despite this increase, there is a notable decrease in 2023 to 21,882 million USD. The rising trend in current liabilities through most of the period indicates growing short-term obligations, which may impact liquidity and working capital management strategies.

Cash ratio

The cash ratio, representing the proportion of cash assets to current liabilities, declines from 0.28 in 2018 to a low of 0.18 in 2022. Although it shows a slight improvement to 0.20 in 2023, the ratio remains below the initial levels observed in 2018 and 2019. This decreasing trend suggests a relative reduction in liquidity coverage of short-term liabilities, indicating potential increased liquidity risk or more aggressive liability management over time.