HP Inc (HPQ)
Profitability ratios
Return on sales
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 21.42% | 19.49% | 21.13% | 18.43% | 19.01% |
| Operating profit margin | 6.43% | 7.25% | 8.44% | 6.11% | 6.60% |
| Pretax margin | 5.47% | 6.87% | 11.93% | 5.72% | 4.29% |
| Net profit margin | 6.07% | 4.98% | 10.31% | 5.02% | 5.36% |
Based on the provided data, the profitability ratios of HP Inc have shown varying trends over the past five years. The gross profit margin, representing the efficiency of the company's production and pricing, has fluctuated, reaching its highest point in 2023 at 21.42% and its lowest in 2020 at 18.43%.
The operating profit margin, which indicates the company's ability to control costs and generate earnings from its core business activities, experienced a slight decline over the years, with a dip to 6.96% in 2020 before showing a modest recovery in 2023 at 7.86%.
The pretax margin, representing the proportion of each dollar of revenue that translates into profit before taxes, displayed significant variability, with a notable peak in 2021 at 11.83% followed by a decline in the subsequent years.
Lastly, the net profit margin, illustrating the firm's overall profitability after all expenses, has exhibited fluctuating trends, reaching its highest point in 2021 at 10.24% before moderately declining in the following years.
In summary, the profitability ratios of HP Inc reflect a mixed performance over the analyzed period, demonstrating the company's ability to manage costs and generate profits, albeit with some degree of inconsistency in the results.
Return on investment
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 9.34% | 11.84% | 13.88% | 9.98% | 11.58% |
| Return on assets (ROA) | 8.82% | 8.14% | 16.94% | 8.20% | 9.42% |
| Return on total capital | 42.22% | 58.67% | 113.01% | 105.94% | 108.08% |
| Return on equity (ROE) | — | — | — | — | — |
HP Inc's profitability ratios indicate varying performance over the past five years. Operating return on assets (Operating ROA) has shown a gradual decline from 14.54% in 2021 to 11.41% in 2023, signifying a decrease in the company's ability to generate profits from its assets through its operations. Similarly, return on assets (ROA) has fluctuated, with a high of 16.84% in 2021, followed by a decrease to 8.82% in 2023, indicating fluctuations in the company's overall profit generation from its assets.
On the other hand, return on total capital has exhibited significant volatility, with a decline from 96.11% in 2021 to 50.18% in 2023, suggesting a notable decrease in the company's ability to generate returns from its total capital. Unfortunately, return on equity (ROE) data is unavailable for analysis.
These trends may raise concerns about HP Inc's profitability and its ability to efficiently utilize its assets and capital to generate returns. Further analysis of the company's financial performance and strategies may provide insights into the reasons behind these fluctuations and the potential impact on its overall financial health.