HP Inc (HPQ)
Return on total capital
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 3,456,000 | 4,559,000 | 5,359,000 | 3,462,000 | 3,877,000 |
| Long-term debt | US$ in thousands | 9,254,000 | 10,796,000 | 6,386,000 | 5,543,000 | 4,780,000 |
| Total stockholders’ equity | US$ in thousands | -1,069,000 | -3,025,000 | -1,644,000 | -2,275,000 | -1,193,000 |
| Return on total capital | 42.22% | 58.67% | 113.01% | 105.94% | 108.08% |
October 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $3,456,000K ÷ ($9,254,000K + $-1,069,000K)
= 42.22%
The return on total capital for HP Inc has exhibited a declining trend over the past five years, decreasing from 106.16% in 2019 to 50.18% in 2023. This suggests a lower efficiency in generating returns relative to the total capital employed in the business. It is important to further investigate the factors contributing to this declining trend, such as changes in profitability, asset utilization, or capital structure, to assess the company's overall financial performance and sustainability.
Peer comparison
Oct 31, 2023
Company name
Symbol
Return on total capital
HP Inc
HPQ
42.22%
Hewlett Packard Enterprise Co
HPE
10.25%
International Business Machines
IBM
14.16%