The entity has 17.03
B in debt with debt to equity (D/E) ratio of 1.06, which is OK given its current industry classification. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Hewlett Packard has an asset utilization ratio of 33.86 percent. This indicates that the company is making $0.34 for each dollar of assets. An increasing asset utilization means that Hewlett Packard Enterprise is more efficient with each dollar of assets it utilizes for everyday operations.
Hewlett Packard financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Hewlett Packard, including all of Hewlett Packard's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Hewlett Packard assets, the company is considered highly leveraged. Understanding the
composition and structure of overall Hewlett Packard debt and outstanding corporate bonds gives a good idea of
how risky the capital structure of a business is and if it is worth investing in it. Please read more on our
technical analysis page.
Understanding Hewlett Total Liabilities
Hewlett Packard Ente liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Hewlett Packard Ente has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Hewlett Packard balance sheet include debt obligations and money owed to different Hewlett Packard vendors, workers, and loan providers. Below is the chart of Hewlett short long-term liabilities accounts currently reported on its balance sheet.
You can use Hewlett Packard Enterprise
financial leverage analysis tool to get a better grip on understanding its financial position
How important is Hewlett Packard's Liquidity
Hewlett Packard
financial leverage refers to using borrowed capital as a funding source to finance Hewlett Packard Enterprise ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Hewlett Packard financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Hewlett Packard's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Hewlett Packard's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Hewlett Packard's total debt and its cash.
Going after Hewlett Financials
The firm reported the last year's revenue of 26.98
B. Reported Net Loss for the year was (322
M) with profit before taxes, overhead, and interest of 8.5
B.
Asset Breakdown
| Total Assets | 55.59 Billion |
| Current Assets | 17.96 Billion |
| Assets Non Current | 37.63 Billion |
| Goodwill | 19.45 Billion |
Will Hewlett continue to surge?
Latest semi deviation is at 1.87. Hewlett Packard Enterprise currently demonstrates below-verage downside deviation. It has Information Ratio of 0.11 and Jensen Alpha of 0.39. However, we do advice investors to further question Hewlett Packard Enterprise expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.
Our Final Take On Hewlett Packard
Although some companies within the communication equipment industry are still a little expensive, even after the recent corrections, Hewlett Packard may offer a potential longer-term growth to shareholders. While some shareholders may not share our view, we believe that right now is not a good time to increase your holdings in Hewlett. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Hewlett Packard.
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Rifka Kats is a Member of Macroaxis Editorial Board. Rifka writes about retail product and service companies from the perspective of a regular consumer and sophisticated investor at the same time. She is passionate about corporate ethics and equality in the workforce.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Rifka Kats do not own shares of Hewlett Packard Enterprise. Please refer to our
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