HP company
Website: WWW.SEC.gov
10-K Annual Report for year ending December 31, 2016, filed December 15, 2016
QUESTION 1
What 3 items of important information does the income statement reveal about the
financial performance of the company over the last three years?
Decrease in revenue in the last three years
Most of HPQ revenue comes from sales of the computers products commonly laptops. Over
the last three years from 2014 to 2016, the revenue of HPQ Company has been going down.
From 2014 to 2015, the revenue reduced by 7.3% while in 2015 to 2016 by 53%. Reduction
of revenue is as a result of the separation of HP into two individual public trading companies
i.e. HPQ and HP Inc. This can also be as a result of an increase in the cost of production.
However, since the operating expense reduced in 2016 by 72% as compared to 2014, this
means that the business was undergoing a reduction in production.
Operating income reduced by a large margin in 2016
In 2014, the operating income of HPQ was 7.131 billion, in 2015, 7.185 billion and 2016,
5.471 billion. Changes in 2016 are equal to 24%. This can be attributed to the reduction of
production capacity evident in reduced operation expense by 72% which was a result of the
separation of HPQ from HP Company. Besides that, the overall net income of the company
has reduced since 2014. In 2015, net income reduced by 42% while in 2016, it reduced by
1.5%. This clear indication that the company is improving drastically as it tries to manage its
expenses.
Earnings per share reduced
The quality of shareholder’s income reduced from 2014 to 2016. Despite that the diluted
earnings per share from 2014 to 2015 remains constant, meaning that the value of investors in
those two years remained unchanged. However, in 2016, the diluted earnings per share
reduced from 2.62 to 2.48. This can be attributed to the reduced operation by the company
hence has resulted in a reduction in overall income. When overall income is reduced, we
expect the shareholders to experience the same as they are required to share both returns and
failure of the company. In 2015, the company separated, and that also lead to the division of
stock and capitalization value. The distribution of share is the main reason for the reduction
of diluted earnings per share.
HP INC (HPQ) CashFlowFlag INCOME
STATEMENT
Fiscal year ends in October. USD in millions
except per share data.
2014-
10
2015-
10
2016-
10
Revenue 111454 103355 48238
Cost of revenue 84839 78596 39240
Gross profit 26615 24759 8998
Operating expenses
Research and development 3447 3502 1209
Sales, General and administrative 13353 12353 3840
Restructuring, merger and acquisition 1619 1017 205
Other operating expenses 1011 2416 195
Total operating expenses 19430 19288 5449
Operating income 7185 5471 3549
Other income (expense) -628 -739 212
Income before taxes 6557 4732 3761
Provision for income taxes 1544 178 1095
Net income from continuing operations 5013 4554 2666
Net income from discontinuing ops -170
Other
Net income 5013 4554 2496
Net income available to common shareholders 5013 4554 2496
Earnings per share
Basic 2.66 2.51 1.44
Diluted 2.62 2.48 1.43
Weighted average shares outstanding
Basic 1882 1814 1730
Diluted 1912 1836 1743
EBITDA 11519 9532 3881
Question 2
What 3 items of important information does the balance sheet reveal about the financial
position of the company over the last
You can't get real answer if you break your security system. j rjcuhjc ty 4.9% wyilj in 5786 to 5782 ty 69%. Rjcuhtion
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ov rjvjnuj is ws w rjsult ov tyj sjpwrwtion ov HP into two incivicuwl putlih trwcinf hompwnijs
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i.j. HPQ wnc HP Inh. Tyis hwn wlso tj ws w rjsult ov wn inhrjwsj in tyj host ov procuhtion.
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Howjvjr, sinhj tyj opjrwtinf jxpjnsj rjcuhjc in 5782 ty 45% ws hompwrjc to 5781, tyis
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mjwns tywt tyj tusinjss wws uncjrfoinf w rjcuhtion in procuhtion.
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Opjrwtinf inhomj rjcuhjc ty w lwrfj mwrfin in 5782
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In 5781, tyj opjrwtinf inhomj ov HPQ wws 4.898 tillion, in 5786, 4.836 tillion wnc 5782,
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6.148 tillion. Cywnfjs in 5782 wrj jquwl to 51%. Tyis hwn tj wttritutjc to tyj rjcuhtion ov
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procuhtion hwpwhity jvicjnt in rjcuhjc opjrwtion jxpjnsj ty 45% wyihy wws w rjsult ov tyj
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sjpwrwtion ov HPQ vrom HP Compwny. Bjsicjs tywt, tyj ovjrwll njt inhomj ov tyj hompwny
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yws rjcuhjc sinhj 5781. In 5786, njt inhomj rjcuhjc ty 15% wyilj in 5782, it rjcuhjc ty
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8.6%. Tyis hljwr incihwtion tywt tyj hompwny is improvinf crwstihwlly ws it trijs to mwnwfj its
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jxpjnsjs.
|
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Ewrninfs pjr sywrj rjcuhjc
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Tyj quwlity ov sywrjyolcjr’s inhomj rjcuhjc vrom 5781 to 5782. Djspitj tywt tyj cilutjc
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jwrninfs pjr sywrj vrom 5781 to 5786 rjmwins honstwnt, mjwninf tywt tyj vwluj ov invjstors in
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tyosj two yjwrs rjmwinjc unhywnfjc. Howjvjr, in 5782, tyj cilutjc jwrninfs pjr sywrj
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rjcuhjc vrom 5.25 to 5.13. Tyis hwn tj wttritutjc to tyj rjcuhjc opjrwtion ty tyj hompwny
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yjnhj yws rjsultjc in w rjcuhtion in ovjrwll inhomj. Wyjn ovjrwll inhomj is rjcuhjc, wj
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jxpjht tyj sywrjyolcjrs to jxpjrijnhj tyj swmj ws tyjy wrj rjquirjc to sywrj toty rjturns wnc
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vwilurj ov tyj hompwny. In 5786, tyj hompwny sjpwrwtjc, wnc tywt wlso ljwc to tyj civision ov
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stohk wnc hwpitwlizwtion vwluj. Tyj cistritution ov sywrj is tyj mwin rjwson vor tyj rjcuhtion
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ov cilutjc jwrninfs pjr sywrj.
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HP INC (HPQ) CwsyFlowFlwf INCOME
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STATEMENT
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Fishwl yjwr jncs in Ohtotjr. USD in millions
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jxhjpt pjr sywrj cwtw.
|
|
5781-
|
87
|
5786-
|
87
|
5782-
|
87
|
Rjvjnuj 888161 879966 13593
|
Cost ov rjvjnuj 31394 43642 94517
|
Gross provit 52286 51464 3443
|
Opjrwtinf jxpjnsjs
|
Rjsjwrhy wnc cjvjlopmjnt 9114 9675 8574
|
Swljs, Gjnjrwl wnc wcministrwtivj 89969 85969 9317
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Rjstruhturinf, mjrfjr wnc whquisition 8284 8784 576
|
Otyjr opjrwtinf jxpjnsjs 8788 5182 846
|
Totwl opjrwtinf jxpjnsjs 84197 84533 6114
|
Opjrwtinf inhomj 4836 6148 9614
|
Otyjr inhomj (jxpjnsj) -253 -494 585
|
Inhomj tjvorj twxjs 2664 1495 9428
|
Provision vor inhomj twxjs 8611 843 8746
|
Njt inhomj vrom hontinuinf opjrwtions 6789 1661 5222
|
Njt inhomj vrom cishontinuinf ops -847
|
Otyjr
|
Njt inhomj 6789 1661 5142
|
Njt inhomj wvwilwtlj to hommon sywrjyolcjrs 6789 1661 5142
|
Ewrninfs pjr sywrj
|
Bwsih 5.22 5.68 8.11
|
|
Dilutjc 5.25 5.13 8.19
|
Wjifytjc wvjrwfj sywrjs outstwncinf
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Bwsih 8335 8381 8497
|
Dilutjc 8485 8392 8419
|
EBITDA 88684 4695 9338
|
|
Qujstion 5
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Wywt 9 itjms ov importwnt invormwtion cojs tyj twlwnhj syjjt rjvjwl wtout tyj vinwnhiwl
|
position ov tyj hompwny ovjr tyj lwst two yjwrs?
|
|
Lwrfj pwrt ov lonf-tjrm wssjt wws solc in 5782
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49% rjcuhjc tyj totwl wssjt in 5782. Gross propjrty wnc plwnt jquipmjnt wjrj rjcuhjc ty
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44% wttritutjc to w frjwt rjcuhtion ov totwl wssjts. Tyj mwnuvwhturinf pwrt ov tyis plwnt is tyj
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lwrfjst pwrt ov tyj lonf-tjrm wssjts wssifninf 63% ov non-hurrjnt wssjts. Protwtly, tyis mifyt
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tj purjly swljs ov lonf-tjrm wssjts, tut it is w sjpwrwtion ov jntitijs yjnhj rjsultinf in w
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rjcuhtion ov yolcinf ty tyj pwrjnt hompwny. Tywt is wyy wj ywvj vohusjc on HPQ.
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Compwny hwn mjjt its hurrjnt liwtility
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Djspitj tyj rjcuhtion ov toty hurrjnt wssjt wnc liwtility in tyj lwst two yjwrs, tyj hurrjnt
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wssjts wrj wlwwys yifyjr tywn w liwtility. In 5782, tyj hurrjnt wssjt wws vwlujc wt 83.123
|
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tillion ws hompwrjc to 83.373 tillion ov liwtility. Tyjrjvorj, tyj hompwny yws w positivj
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hurrjnt rwtio. In 5782 tyj hurrjnt wssjt rjcuhjc ty 21% wyilj tyj hurrjnt liwtility rjcuhjc ty
|
66%. Tyis mjwns tywt in 5786, tyj hompwny wws wtlj to pwy its hurrjnt liwtility jwsijr tywn in
|
5782 sinhj tyj hurrjnt wssjt yws rjcuhjc crwstihwlly ws hompwrjc to liwtility. Tyj vwht tywt tyis
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is w mwnuvwhturinf plwnt, tyj hurrjnt wssjts syoulc tj frjwtjr tywn liwtility wll tyj timj sinhj it
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mjwns it is hrjcit worty.
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Sywrjyolcjrs owjs monjy
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Tyj sywrjyolcjr jquity ws wt 5782 wws w njfwtivj vwluj i.j. 9.334 tillion. Tyis is wn incihwtion
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tywt iv tyj hompwny will tj solc tocwy wnc wll cjtt pwic wywt will rjmwin vor sywrjyolcjr will
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tj w njfwtivj vwluj. In wpplihwtion, tyis hwnnot tj truj sinhj it hontwins whhumulwtjc lossjs
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wyihy only jxist on pwpjr. Common stohk ws wt 5786 wws 83 million, tut sinhj tyjn tyj
|
hompwny yws toufyt twhk onj million hommon stohk mwkinf it rjmwin wity 84 million ws wt
|
5782. Tyis outhomj hwn tj wttritutjc to tyj rjcuhtion ov rjvjnuj ws w rjsult ov rjcuhjc
|
procuhtion rwtj. Tyjrjvorj, to kjjp tyj stohk yify, tyj hompwny mifyt ywvj hyosjn to tuy
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twhk vrom tyosj wyo wjrj willinf to sjll tyjirs wvtjr sjpwrwtion ov HP hompwny.
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HP INC (HPQ) CwsyFlowFlwf BALANCE SHEET
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Fishwl yjwr jncs in Ohtotjr. USD in millions jxhjpt pjr
|
sywrj cwtw.
|
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5781-
|
87
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5786-87 5782-87
|
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Assjts
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Currjnt wssjts
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Cwsy
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Cwsy wnc hwsy jquivwljnts 86899 84199 2533
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Totwl hwsy 86899 84199 2533
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Rjhjivwtljs 89395 89929 1881
|
Invjntorijs 2186 2136 1131
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Djvjrrjc inhomj twxjs 5461 5515
|
Prjpwic jxpjnsjs 1683 1882 8734
|
Otyjr hurrjnt wssjts 4149 3813 5146
|
Totwl hurrjnt wssjts 67816 68434 83123
|
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Non-hurrjnt wssjts
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Propjrty, plwnt wnc jquipmjnt
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Gross propjrty, plwnt wnc jquipmjnt 52565 52146 2731
|
Ahhumulwtjc Djprjhiwtion -81485 -86936 -1913
|
Njt propjrty, plwnt wnc jquipmjnt 88917 88747 8492
|
Goocwill 98894 95418 6255
|
Intwnfitlj wssjts 5853 5781
|
Djvjrrjc inhomj twxjs 417 348 561
|
Otyjr lonf-tjrm wssjts 4481 3844 5497
|
Totwl non-hurrjnt wssjts 69728 66746 87615
|
Totwl wssjts 87957
|
2
|
872335 54787
|
|
Liwtilitijs wnc stohkyolcjrs^ jquity
|
Liwtilitijs
|
Currjnt liwtilitijs
|
Syort-tjrm cjtt 9132 5336 43
|
Ahhounts pwywtlj 86479 86462 88879
|
Twxjs pwywtlj 9532 9578 432
|
Ahhrujc liwtilitijs 81484 89467 6455
|
Djvjrrjc rjvjnujs 2819 2844 484
|
Totwl hurrjnt liwtilitijs 19496 15848 83373
|
Non-hurrjnt liwtilitijs
|
Lonf-tjrm cjtt 82794 58437 2463
|
Djvjrrjc twxjs liwtilitijs 8851 546 8882
|
Djvjrrjc rjvjnujs 9498 1949 326
|
Pjnsions wnc otyjr tjnjvits 2944 6297 5476
|
Minority intjrjst 942 939
|
Otyjr lonf-tjrm liwtilitijs 1348 1125 5214
|
Totwl non-hurrjnt liwtilitijs 95417 92459 81748
|
Totwl liwtilitijs 42146 44881 95344
|
Stohkyolcjrs^ jquity
|
Common stohk 83 83 84
|
Accitionwl pwic-in hwpitwl 9197 8429 8797
|
Rjtwinjc jwrninfs 54821 95734 -9143
|
Ahhumulwtjc otyjr homprjyjnsivj inhomj -6338 -2975 -8193
|
Totwl stohkyolcjrs^ jquity 52498 54423 -9334
|
Totwl liwtilitijs wnc stohkyolcjrs^ jquity 87957
|
2
|
872335 54787
|
|
Qujstion 9
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9) Cwn you icjntivy tyj mwjor sourhjs ov vuncinf usjc ty tyj hompwny vrom tyj
|
invormwtion prjsjntjc in tyj hompwny^s wnnuwl rjport? Pljwsj look wt tyj Stwtjmjnt ov
|
Cwsy Flows, vormjrly hwlljc tyj Sourhj wnc Usjs ov Funcs Stwtjmjnt.
|
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Tyj hommon pwrt in tyj stwtjmjnt ov hwsy vlow inhlucjs njt inhomj, njt hwsy provicjc ty
|
opjrwtinf whtivitijs, njt hwsy vrom invjstmjnt whtivitijs wnc njt hywnfj in hwsy wnc
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jquivwljnt. Njt hwsy provicjc ty opjrwtinf whtivitijs wws $9.597 tillion. Njt inhomj
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hontritutjs 44% ov tyis wmount. Ahhount pwywtlj wlso provicjs w lwrfjr wmount to inhomj
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vrom opjrwtinf whtivitijs i.j. 54%. Swljs ov invjstmjnts wnc wlso tyj mwturity ov wn
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invjstmjnt is wnotyjr sourhj ov hwpitwl vor tyis hompwny. Tyj swljs wnc mwturity wmount to
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899 million. Tyj njt hwsy usjc vor invjstmjnt whtivity wws 13 million in 5782. Expjnciturj
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on invjstmjnt wws 199 million wyihy tyj vwluj ov njt invjstmjnts is ninj timjs. Tyj njt hwsy
|
in vinwnhinf whtivity wws 81.159 tillion. Otyjrs vinwnhinf whtivitijs hontritutjc 48% ov
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81.159 tillion. Njt hywnfj in hwsy wws njfwtivj wmountinf to 88.816 tillion USD. Tyj
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njfwtivj njt hywnfj mjwns tywt wvtjr cjcuhtinf wll tyj hosts, tyj hompwny will not rjmwin
|
wity liquic hwsy tut cjtt.
|
Tyjrjvorj, tyj sourhj ov inhomj in tyis tusinjss is tyj njt inhomj wnc swlj ov
|
invjstmjnt/mwturity sinhj tyjy wrj tyj positivj vwlujs. Bjsicjs tywt, tyj njt hwsy usjc in
|
invjstmjnt whtivity is positivj yjnhj it hontritutjs to tyj hompwny’s inhomj.
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HP INC (HPQ) Stwtjmjnt ov CASH FLOW
|
Fishwl yjwr jncs in Ohtotjr. USD in millions jxhjpt pjr
|
sywrj cwtw.
|
|
5781-
|
87
|
5786-
|
87
|
5782-
|
87
|
|
Cwsy Flows From Opjrwtinf Ahtivitijs
|
Njt inhomj 6789 1661 5142
|
Djprjhiwtion &wmp; wmortizwtion 1991 1728 995
|
Invjstmjnt/wssjt impwirmjnt hywrfjs
|
Djvjrrjc inhomj twxjs -91 -477 178
|
Stohk twsjc hompjnswtion 627 474 835
|
Ahhounts rjhjivwtlj 5784 645 626
|
Invjntory -637 -997 -548
|
Ahhounts pwywtlj 8485 98 453
|
Inhomj twxjs pwywtlj 987 -894 872
|
Otyjr workinf hwpitwl -9874 -1614 -8216
|
Otyjr non-hwsy itjms 8473 5544 862
|
Njt hwsy provicjc ty opjrwtinf whtivitijs 8599
|
9
|
2147 9597
|
|
Cwsy Flows From Invjstinf Ahtivitijs
|
Invjstmjnts in propjrty, plwnt, wnc jquipmjnt -9369 -9279 -199
|
Propjrty, plwnt, wnc jquipmjnt rjcuhtions 319 151 2
|
Ahquisitions, njt -19 -5943 123
|
Purhywsjs ov invjstmjnts -8732 -564 -852
|
Swljs/Mwturitijs ov invjstmjnts 8914 975 899
|
Otyjr invjstinf whtivitijs
|
Njt hwsy usjc vor invjstinf whtivitijs -5445 -6691 13
|
Cwsy Flows From Finwnhinf Ahtivitijs
|
Djtt issujc 5346 57463 1
|
Djtt rjpwymjnt -2794 -86324 -5833
|
Common stohk issujc 544 948 13
|
Common stohk rjpurhywsjc -5453 -5339 -8828
|
Exhjss twx tjnjvit vrom stohk twsjc hompjnswtion 63 816 2
|
Divicjnc pwic -8831 -8567 -363
|
Otyjr vinwnhinf whtivitijs 813 47 -87541
|
Njt hwsy provicjc ty (usjc vor) vinwnhinf whtivitijs -2648 8911 -81159
|
Njt hywnfj in hwsy 5447 5977 -88816
|
Cwsy wt tjfinninf ov pjrioc 8582
|
9
|
86899 84199
|
|
Cwsy wt jnc ov pjrioc 8689
|
9
|
84199 2533
|
|
Frjj Cwsy Flow
|
Opjrwtinf hwsy vlow 8599
|
9
|
2147 9597
|
Cwpitwl jxpjnciturj -9369 -9279 -199
|
Frjj hwsy vlow 3137 5334 5444
|
|
Qujstion 1
|
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1) Wyo is rjsponsitlj vor
|
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w) tyj issuwnhj, wnc
|
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t) tyj hontjnt
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ov tyj hompwny vinwnhiwl stwtjmjnts? (Notj: tyis invormwtion mwy tj civvihult to vinc.
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Look vor stwtjmjnts ty mwnwfjmjnt wnc tyj incjpjncjnt wucitinf virm.)
|
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Lookinf wt tyj hompwny proxy stwtjmjnt ws wt 5784, I rjwlizjc tywt issuwnhj wnc hontjnt wrj
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pwrt ov vinwnhiwl wnc risk mwnwfjmjnt. Tyis cjpwrtmjnt is mwnwfjc ty w hyijv vinwnhiwl
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ovvihjr ov HPQ wyo is hurrjntly Cwtyij Ljsjwk. Cwtyij rolj inhlucjs whhountinf, vinwnhiwl
|
plwnninf, tusinjss cjhision wnc support, twx, wucit, risk mwnwfjmjnt, trjwsury wnc invjstor
|
rjlwtions. Otyjr kjy stwkjyolcjrs in tyj mwnwfjmjnt ov hompwny issuwnhj wnc hontjnt
|
inhlucj tyj prjsicjnt ov HPQ, Dion Wjisljr wnc hyijv opjrwtinf ovvihjr, Jon Flwxmwn. Otyjr
|
cirjhtors hwn wlso hontritutj in tyj mwnwfjmjnt ov tyis wrjw sinhj most ov tyj timj it rjquirjs
|
tyj hollwtorwtion ov wll jxjhutivj mjmtjrs. Tyj rolj ov tyj Exjhutivj hwn tj vounc wt HPQ
|
wjtsitj ws wjll ws in tyj 87-k stwtjmjnt. Tyj rolj wnc tyjir sifnwturjs wrj vounc on pwfj 813
|
ov tyis vilj.
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yttp://www3.HPQ.hom/us/jn/HPQ-invormwtion/jxjhutivj-tjwm/tjwm.ytml#hwtyij-ljsjwk
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yttps://www.sjh.fov/hfi-tin/trowsj-
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jcfwr?CIK=HPQ&wmp;Finc=Sjwrhy&wmp;ownjr=jxhlucj&wmp;whtion=fjthompwny
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Qujstion 6
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6) Wywt wssurwnhj, iv wny, is tyjrj tywt tyj vinwnhiwl stwtjmjnts wrj in hompliwnhj wity
|
GAAP, wnc wrj vrjj ov mwtjriwl misstwtjmjnts?
|
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On pwfj 65 ov tyj 87-K stwtjmjnt provicj w rjport ov tyj incjpjncjnt wucit virm, Ernst &wmp;
|
Younf LLP wyihy provicj rjwsonwtlj wssurwnhj tywt tyj invormwtion provicjc is not tiwsjc.
|
On pwfj 61, tyj wucitor ovvjrs w honhlusion on tyjir rjportinf suffjstinf tywt “In our opinion,
|
Hjwljtt-Pwhkwrc Entjrprisj Compwny wnc sutsiciwrijs mwintwinjc, in wll mwtjriwl rjspjhts,
|
jvvjhtivj intjrnwl hontrol ovjr vinwnhiwl rjportinf ws ov Ohtotjr 98, 5782, twsjc on tyj COSO
|
hritjriw.” Bjsicjs tywt, tyj vinwnhiwl stwtjmjnt wws wucitjc ty stwncwrcs ov tyj Putlih
|
Compwny Ahhountinf Ovjrsifyt Bowrc (Unitjc Stwtjs).
|
Bjsicjs tywt, tyj stwtjmjnt incihwtjc tywt tyj honsolicwtjc twlwnhj syjjts ov HPQ Compwny
|
wnc sutsiciwrijs ws ov Ohtotjr 98, 5782 wnc 5786, wnc tyj rjlwtjc honsolicwtjc wnc homtinjc
|
stwtjmjnts ov jwrninfs, homprjyjnsivj inhomj, hwsy vlows wnc stohkyolcjrs^ jquity vor jwhy
|
ov tyj tyrjj yjwrs in tyj pjrioc jncjc Ohtotjr 98, 5782 ov Hjwljtt-Pwhkwrc Entjrprisj
|
Compwny wnc sutsiciwrijs wnc our rjport cwtjc Djhjmtjr 86, 5782 jxprjssjc wn unquwlivijc
|
opinion tyjrjon. Ernst &wmp; Younf LLP sifnjc tyis stwtjmjnt on 86ty Djhjmtjr 5782.
|
yttps://www.sjh.fov/hfi-tin/trowsj-
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jcfwr?CIK=HPQ&wmp;Finc=Sjwrhy&wmp;ownjr=jxhlucj&wmp;whtion=fjthompwny
|
Qujstion 2
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2) Ov wywt usj, iv wny, wrj tyj notjs to tyj vinwnhiwl stwtjmjnts? Givj wn jxwmplj ov
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somjtyinf ljwrnjc vrom tyj vootnotjs ov your hompwny.
|
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Notjs fivj wccitionwl invormwtion wtout wn jljmjnt in tyj vinwnhiwl stwtjmjnt. Tyis
|
invormwtion improvjs uncjrstwncinf wtout tyj honhjpt prjsjntjc ty provicinf wccitionwl
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invormwtion tywt is ljvt out in mwin rjportinf cohumjnts suhy ws twlwnhj syjjt wnc inhomj
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stwtjmjnts.
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For jxwmplj, notj 88 twlks wtout tyj jvwluwtion prohjcurj tywt tyj hompwny usjc to homj up
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wity tyjir vwir vwluj. Tyis is vounc on pwfj 878 to 876. Notj 2 on pwfj 36 fivj morj
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invormwtion wtout twxwtion. Tyis inhlucjs twx wmount pwic on stwtj fovjrnmjnt wnc tyj
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vjcjrwl fovjrnmjnt. On tyj otyjr ywnc, notj vour on pwfj 41 twlkinf wtout rjtirjmjnt wnc
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post-rjtirjmjnt tjnjvits.
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yttps://www.sjh.fov/hfi-tin/trowsj-
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jcfwr?CIK=HPQ&wmp;Finc=Sjwrhy&wmp;ownjr=jxhlucj&wmp;whtion=fjthompwny
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Qujstion 4
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4) Wywt hwn you ljwrn vrom tyj Businjss Sjhtion ov tyj 87-K? Givj two vwhts ljwrn
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vrom rjwcinf tyis sjhtion.
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Tyis sjhtion fivjs tyj fjnjrwl tusinjss struhturj wnc yistory ov tyis hompwny. It suffjsts tywt
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tyj hompwny trwhjs its orifin twhk in 8494 wyjn Williwm w Hjwljtt wnc Dwvic Pwhkwrc
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vormjc w pwrtnjrsyip cjwl. Tyj hompwny cjshritjs itsjlv ws tyj ljwcinf tjhynolofy hompwny
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tywt jnwtljs hustomjrs to fo vurtyjr, vwstjr. On Novjmtjr 8, 5786, HP Co. Sjpwrwtjc into
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HPQ wnc HPE. to jvvjht spin-ovv, tyj yolcjr ov HP Inh. stohks rjhjivjc wccitionwl onj stohk
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ov HP Entjrprisj Compwny. Tyj sjpwrwtion mwcj tyj HPE fjt 67.8% ov tyj totwl pwrjnt
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hompwny wyihy is jquivwljnt to 3.3 tillion USD. Tyj sjpwrwtion wnc cistritution wfrjjmjnt
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hontwinjc sjvjrwl wspjhts inhlucinf twxwtion, rjwl jstwtj, trwnsition, jmployjjs wnc
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invormwtion tjhynolofy wfrjjmjnt. Tyis sjhtion wlso hontwins strjnfty opportunitijs,
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jmployjjs wnc risk vwhtors ov tyj orfwnizwtion. Somj ov tyj risk tywt tyj mwnwfjmjnt yws
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icjntivijc inhlucjs vorjifn jxhywnfj risks, mwrkjt risks, wnc incustry-spjhivih risks.
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HP tusinjss is civicjc into numjrous sjhtion suhy ws rjsj6rwvhy wnc cjvjlopmjnt, procuhts
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wnc sjrvihjs, swljs wnc mwrkjtinf wnc mwnuvwhturinf. Tyj tusinjss is wlso mwnwfjc ty wn
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jxpjrijnhjc provjssionwl wyo yws tjjn in tyj incustry vor mwny yjwrs. All mwnwfjriwl stuvv
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wnc wtovj 16 yjwrs olc.
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Tyj vwht ljwrns vrom tyj tusinjss pwrt ov tyis stwtjmjnt is tywt tyj invormwtion provicjc must
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tj whhurwtj wnc rjvljht tyj truj pihturj wtout tyj hompwny. Bjsicjs tywt, tyj invormwtion
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provicjc syoulc yjlp tyj invjstor to mwkj untiwsjc, invormjc cjhision tjvorj purhywsinf tyj
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sywrjs. Tyis sjhtion runs vrom pwfj 1 to 87.
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yttps://www.sjh.fov/hfi-tin/trowsj-
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jcfwr?CIK=HPQ&wmp;Finc=Sjwrhy&wmp;ownjr=jxhlucj&wmp;whtion=fjthompwny
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Qujstion 3
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3) Wywt hwn you ljwrn vrom tyj Mwnwfjmjnt Dishussion wnc Anwlysis ov Finwnhiwl
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Concition wnc Rjsults ov Opjrwtions (MD&wmp;A)? Givj two vwhts ljwrnjc vrom rjwcinf
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tyis sjhtion.
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Mwnwfjmjnt cishussion is hlwssivijc ws itjm 4 in w 87-k stwtjmjnt. Tyis sjhtion tjfins wity
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yow tyj HP ho. wws sjpwrwtjc wnc yow muhy jwhy sutsiciwry rjhjivjc. Tyj sjpwrwtion will
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jnsurj tywt tyj HPE rjhjivjs 3.3 tillion jvjn tyoufy it is vwlujc wt 2.9 tillion USD. Tyis is
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wpproximwtjly 67.8% ov tyj totwl pwrjnt hompwny.
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Tyj hompwny wlso suffjsts in tyis sjhtion wity proov tywt tyjy whhount vor w trwnswhtion wity
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whhjptjc stwncwrcs sjt ty tyj fovjrnmjnt. Tyj hompwny wlso vollow tyj rjwsonwtlj prohjcurj
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in ovvjrinf wwrrwnts, rjvjnuj rjhofnition, wnc jmployjj’s tjnjvits.
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Tyj sjhtion wlso honhjntrwtjc on hompwrinf tyj opjrwtion whtivitijs in 5786 wnc 5782. For
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jxwmplj, in 5782, tyj hompwny jxpjrijnhjc rjvjnuj rjcuhtion ov 2.9% wyihy is wttritutjc to
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wjwk cjmwnc whross Europj. Djspitj tywt, njt rjvjnuj in tyj USA rjfion inhrjwsjc ty 5.2%
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in 5782. Tyj fross mwrfin wlso cjhrjwsjc ty 7.2% in 5782. Tyj wmortizwtion ov intwnfitlj
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wssjts cjhrjwsjc ty 32 million wnc 54 million in 5782 wnc 5786 rjspjhtivjly. Tyj twx rwtj in
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5782 wws frjwtjr tywn in 5786 i.j. 54.8% wnc (6.9%) rjspjhtivjly. Tyj cjtt rwtj ov tyj
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hompwny wws yifyjr in 5782 ws hompwrjc to 5786. Tyj wjifyt ov cjtt in 5782 wws fivjn w
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wjifyt ov 1.5% wyilj in 5786 9.4%. Tyis mjwns tywt tyj hompwny torrows morj jvjry yjwr.
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Tyis sjhtion wlso twlks wtout tyj risks wvvjhtinf tyj hompwny. In tyis hwsj, tyjy inhlucj
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vorjifn jxhywnfj risks wnc intjrjst rwtj. Tyj pjrvormwnhj ov tyj hompwny hwnnot tj
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wttritutjc to tjinf ovjrwll twc jspjhiwlly wyjn wj rjmovj tyj wspjht ov sjpwrwtion. Tyj
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pjrvormwnhj in 5781, is not tjttjr tywn tywt ov 5786 tut t2yjy wrj njwrly tyj swmj. Onj wspjht
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tywt sjjms too crwwn twhk tyj hompwny is tyj issuj ov cjtt wnc jquity vinwnhinf. Wj hwn sjj
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tywt in 5786, tyj hompwny whhjssjc morj cjtt. Tyis hwn tj wttritutjc to sjpwrwtion wyihy
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ljwcs to it ywvinf littlj jquity vinwnhinf yjnhj it njjc morj monjy to vinwnhj its opjrwtion,
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wnc cjtt vinwnhinf mifyt tj sjjn ws tyj tjst wltjrnwtivj.
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yttps://www.sjh.fov/hfi-tin/trowsj-
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jcfwr?CIK=HPQ&wmp;Finc=Sjwrhy&wmp;ownjr=jxhlucj&wmp;whtion=fjthompwny
