HP Inc (HPQ)
Profitability ratios
Return on sales
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 22.07% | 21.42% | 19.49% | 21.13% | 18.43% |
| Operating profit margin | 7.13% | 6.43% | 7.25% | 8.44% | 6.11% |
| Pretax margin | 6.12% | 5.47% | 6.87% | 11.93% | 5.72% |
| Net profit margin | 5.18% | 6.07% | 4.98% | 10.31% | 5.02% |
HP Inc's profitability ratios have shown some fluctuations in recent years. The gross profit margin has been gradually improving, reaching 22.07% in 2024 from 18.43% in 2020, indicating the company's ability to control production costs and generate higher profits from sales.
The operating profit margin has also shown a positive trend, increasing from 6.11% in 2020 to 7.13% in 2024. This indicates that HP has been effectively managing its operating expenses and is becoming more efficient in its core business operations.
The pretax margin, however, has experienced some volatility, with a sharp decrease in 2021 followed by a gradual recovery in the subsequent years. In 2024, the pretax margin stood at 6.12%, showing improvement but still below the levels seen in 2021 and 2022.
Similarly, the net profit margin has varied over the years, from a low of 4.98% in 2022 to a high of 10.31% in 2021. In 2024, the net profit margin was 5.18%, indicating HP's ability to translate revenues into profits after accounting for all expenses and taxes.
Overall, while HP Inc has shown improvement in its gross profit and operating profit margins, there are fluctuations in the pretax margin and net profit margin which may require further analysis to understand the underlying factors impacting the company's profitability.
Return on investment
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 9.57% | 9.34% | 11.84% | 13.88% | 9.98% |
| Return on assets (ROA) | 6.95% | 8.82% | 8.14% | 16.94% | 8.20% |
| Return on total capital | 55.01% | 42.22% | 58.67% | 113.01% | 105.94% |
| Return on equity (ROE) | — | — | — | — | — |
HP Inc's profitability ratios have shown mixed performance over the past five years.
1. Operating return on assets (Operating ROA) has ranged from 9.34% to 13.88% over the period, indicating the company's ability to generate operating income relative to its total assets has been relatively stable.
2. Return on assets (ROA) has fluctuated between 6.95% and 16.94%, suggesting varying efficiency in generating profits from its assets.
3. Return on total capital has shown significant variability, ranging from 42.22% to 113.01% over the past five years. This ratio reflects the company's ability to generate a return for both debt and equity holders.
4. Return on equity (ROE) data is not provided for the given period, thus making it challenging to analyze the return generated for equity shareholders.
Overall, it seems that HP Inc has experienced fluctuations in profitability ratios over the past five years, suggesting a mix of operational efficiency and financial leverage implications.