Hewlett Packard Enterprise Co (HPE)
Profitability ratios
Return on sales
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 78.74% | 76.56% | 79.47% | 76.12% | 77.89% |
| Operating profit margin | 7.17% | 2.74% | 4.07% | -1.22% | 4.37% |
| Pretax margin | 7.65% | 3.07% | 12.91% | -1.64% | 5.33% |
| Net profit margin | 6.95% | 3.05% | 12.33% | -1.19% | 3.60% |
Hewlett Packard Enterprise Co's profitability ratios show a mixed performance over the past five years. The gross profit margin, which measures the percentage of revenue that exceeds the cost of goods sold, has shown a fluctuating trend, ranging from 32.39% in 2020 to 36.46% in 2023. This indicates some variability in the company's ability to control its direct production costs.
The operating profit margin, which reflects the proportion of revenue that remains after deducting operating expenses, has also fluctuated, with a slight increase from 5.90% in 2020 to 8.38% in 2023. This suggests some improvement in the company's efficiency in managing its operating expenses and generating profits from its core business operations.
The pretax margin, representing the percentage of each dollar of revenue that results in pre-tax earnings, demonstrates significant variation, ranging from a negative figure of -1.64% in 2020 to a high of 12.91% in 2021. This fluctuation may indicate inconsistency in the company's ability to manage non-operating expenses and generate pre-tax profits.
The net profit margin, reflecting the percentage of each dollar of revenue that translates into net income, also shows a considerable fluctuation, from a negative figure of -1.19% in 2020 to a peak of 12.33% in 2021. This indicates significant variability in the company's ability to manage its overall expenses and produce net profits.
Overall, the profitability ratios suggest that Hewlett Packard Enterprise Co has experienced some inconsistency in controlling its costs and generating profits over the past five years. The company's performance in managing its direct production costs and operating expenses may have contributed to the fluctuations in its profitability margins. An in-depth analysis of specific cost drivers and revenue-generating activities may be beneficial to understand the underlying factors influencing these ratios and to improve the company's overall profitability.
Return on investment
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 3.66% | 1.37% | 1.96% | -0.61% | 2.46% |
| Return on assets (ROA) | 3.54% | 1.52% | 5.94% | -0.60% | 2.02% |
| Return on total capital | 10.25% | 4.86% | 13.69% | 0.57% | 12.64% |
| Return on equity (ROE) | 9.56% | 4.37% | 17.16% | -2.01% | 6.14% |
Hewlett Packard Enterprise Co's profitability ratios show a mixed performance over the past five years.
Firstly, its operating return on assets (Operating ROA) increased from 3.66% in 2021 to 4.27% in 2023. This indicates that the company has been able to generate higher operating profits from its assets, which is a positive sign for its operational efficiency.
Secondly, the return on assets (ROA) fluctuated significantly, declining from 5.94% in 2021 to -0.60% in 2020, before increasing to 3.54% in 2023. This suggests that the company's overall profitability relative to its total assets has been inconsistent, but there has been a recent improvement.
Thirdly, the return on total capital followed a similar trend, increasing from 6.86% in 2021 to 8.01% in 2023. This indicates that the company has been able to generate higher returns in relation to its total capital employed.
Lastly, the return on equity (ROE) also fluctuated, dropping from 17.16% in 2021 to -2.01% in 2020, before rebounding to 9.56% in 2023. This shows that the company's ability to generate profits from shareholders' equity has been volatile, but there has been recent improvement.
In conclusion, Hewlett Packard Enterprise Co's profitability ratios demonstrate mixed performance, with recent improvements in operating return on assets and returns on total capital while ROA and ROE have seen fluctuations over the period.