HP Inc (HPQ)
Solvency ratios
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.25 | 0.28 | 0.17 | 0.16 | 0.14 |
| Debt-to-capital ratio | 1.13 | 1.39 | 1.35 | 1.70 | 1.33 |
| Debt-to-equity ratio | — | — | — | — | — |
| Financial leverage ratio | — | — | — | — | — |
The solvency ratios for HP Inc over the past five years show some notable trends. The debt-to-assets ratio has gradually decreased from 0.29 in 2022 to 0.26 in 2023, indicating that the company’s level of debt in relation to its total assets has improved. This suggests a more stable financial position as a lower ratio indicates less reliance on debt to finance its assets.
Similarly, the debt-to-capital ratio has also exhibited a declining trend, decreasing from 1.36 in 2022 to 1.13 in 2023. This indicates that the proportion of capital financed by debt has decreased, which is generally a positive sign for the company’s financial health.
It is important to note that the debt-to-equity ratio and financial leverage ratio are not provided for the years in question, thus limiting the ability to comprehensively analyze the company's solvency from these perspectives.
Overall, the declining trend in both the debt-to-assets and debt-to-capital ratios suggests that HP Inc has been actively managing its debt levels and improving its solvency position over the past few years. This could indicate a decreasing financial risk and potentially favorable prospects for the company's financial stability. However, it is important to consider these ratios in conjunction with other financial metrics and qualitative factors to gain a more comprehensive understanding of HP Inc's solvency.
Coverage ratios
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 6.31 | 12.70 | 21.10 | 14.49 | 16.02 |
The interest coverage ratio for HP Inc has shown a declining trend over the past five years, as indicated by the values of 7.71, 14.62, 22.11, 16.49, and 17.30 for the years 2023, 2022, 2021, 2020, and 2019, respectively. This ratio measures the company's ability to meet interest payments on its outstanding debt using its earnings before interest and taxes (EBIT). The decreasing trend may indicate a potential decrease in the company's ability to cover its interest expenses with its operating income. It is important for stakeholders to closely monitor this trend, as a declining interest coverage ratio could signal financial distress and potential difficulties in meeting debt obligations.