HP Inc (HPQ)
Debt-to-assets ratio
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 9,254,000 | 10,796,000 | 6,386,000 | 5,543,000 | 4,780,000 |
| Total assets | US$ in thousands | 37,004,000 | 38,494,000 | 38,610,000 | 34,681,000 | 33,467,000 |
| Debt-to-assets ratio | 0.25 | 0.28 | 0.17 | 0.16 | 0.14 |
October 31, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $9,254,000K ÷ $37,004,000K
= 0.25
The debt-to-assets ratio is a measure of a company's financial leverage, indicating the proportion of its assets financed by debt. A higher ratio suggests a greater reliance on borrowing to fund operations and asset acquisitions, potentially indicating higher financial risk.
Based on the provided data, HP Inc's debt-to-assets ratio has exhibited some fluctuation over the past five years. In 2019, the ratio stood at 0.15, indicating that 15% of the company's assets were funded by debt. Over the subsequent years, the ratio increased, reaching 0.29 in 2022 before declining to 0.26 in 2023.
The increase in the debt-to-assets ratio from 2019 to 2022 could suggest that HP Inc took on more debt relative to its asset base. However, the decrease in 2023 indicates a reduction in this ratio compared to the previous year, implying a decrease in the proportion of assets funded by debt.
Despite the fluctuations, HP Inc's debt-to-assets ratio remained below 0.3 throughout the period, indicating that the company relied more on equity financing than debt financing to support its asset base. This suggests lower financial risk and potentially favorable creditworthiness.
Overall, the trend in HP Inc's debt-to-assets ratio reflects a balanced approach to capital structure, with some variation from year to year. It would be essential to consider the company's overall financial strategy and economic environment to better understand the implications of these changes in the ratio.
Peer comparison
Oct 31, 2023