HP Inc (HPQ)
Solvency ratios
| Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | Apr 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.26 | 0.25 | 0.25 | 0.28 | 0.29 | 0.28 | 0.26 | 0.21 | 0.16 | 0.17 | 0.19 | 0.14 | 0.14 | 0.16 | 0.17 | 0.12 | 0.12 | 0.14 | 0.00 | 0.00 |
| Debt-to-capital ratio | 1.21 | 1.13 | 1.32 | 1.33 | 1.59 | 1.39 | 1.30 | 1.31 | 1.58 | 1.35 | 2.33 | 3.16 | 2.90 | 1.70 | 1.50 | 1.23 | 1.71 | 1.33 | — | — |
| Debt-to-equity ratio | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Financial leverage ratio | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
The solvency ratios of HP Inc show consistent trends over the past eight quarters. The debt-to-assets ratio has ranged from 0.26 to 0.30, indicating that, on average, around 26% to 30% of the company's assets are financed by debt. This ratio has remained relatively stable, suggesting a prudent level of leverage.
The debt-to-capital ratio has fluctuated between 1.13 to 1.53, showing some variability in the mix of debt and equity financing. This ratio peaked in Q1 2023 but has since decreased, indicating a slightly improved capital structure over the last few quarters.
The debt-to-equity ratio and financial leverage ratio are not provided in the data, but the other solvency ratios suggest that HP Inc has maintained a reasonable level of financial health and has effectively managed its debt levels relative to its assets and capital.
Overall, HP Inc appears to have a stable financial position based on its solvency ratios, with a manageable level of debt-to-assets and debt-to-capital ratios. Continued monitoring of these ratios will be crucial to assess any changes in the company's solvency and financial risk over time.
Coverage ratios
| Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | Apr 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 6.99 | 6.30 | 5.68 | 6.68 | 9.02 | 12.63 | 17.51 | 19.84 | 21.04 | 20.93 | 19.60 | 18.18 | 15.99 | 14.42 | 14.41 | 15.54 | 16.17 | 16.02 | 15.52 | 14.76 |
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt with its operating income. A higher interest coverage ratio indicates that a company is more capable of servicing its debt.
Analyzing the interest coverage ratio of HP Inc over the past quarters shows a general downward trend. In Q1 2024, the interest coverage ratio was 8.17, reflecting a moderate decline from the peak of 21.35 in Q2 2022. The ratio has decreased consistently since Q2 2022, suggesting a possible strain on HP Inc's ability to cover its interest expenses with its operating income.
While the interest coverage ratio remains above 1, indicating that the company is generating sufficient operating income to cover its interest payments, the decreasing trend raises concerns about its future debt servicing capability. It is essential for HP Inc to monitor this ratio closely and take necessary actions to improve its ability to meet its interest obligations in the long term.