HP (HPQ) Interest Coverage

: 8.84 (As of Jan. 2024)

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Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. HP's Operating Income for the three months ended in Jan. 2024 was $1,025 Mil. HP's Interest Expense for the three months ended in Jan. 2024 was $-116 Mil. HP's interest coverage for the quarter that ended in Jan. 2024 was 8.84. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for HP's Interest Coverage or its related term are showing as below:

HPQ' s Interest Coverage Range Over the Past 10 Years
Min: 7.71 Med: 13.44 Max: 23.51
Current: 8.23

HPQ's Interest Coverage is ranked worse than
59.35% of 1599 companies
in the Hardware industry
Industry Median: 12.75 vs HPQ: 8.23

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

HP Interest Coverage Historical Data

The historical data trend for HP's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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HP Annual Data

Trend

Oct14

Oct15

Oct16

Oct17

Oct18

Oct19

Oct20

Oct21

Oct22

Oct23

Interest Coverage

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12.40

16.45

22.35

14.25

7.71

HP Quarterly Data
	Apr19	Jul19	Oct19	Jan20	Apr20	Jul20	Oct20	Jan21	Apr21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Jan23	Apr23	Jul23	Oct23	Jan24
Interest Coverage	Get a 7-Day Free Trial															6.77	6.76	8.02	9.75	8.84

Competitive Comparison

For the Computer Hardware subindustry, HP's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

HP Interest Coverage Distribution

For the Hardware industry and Technology sector, HP's Interest Coverage distribution charts can be found below:

* The bar in red indicates where HP's Interest Coverage falls into.

HP Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

HP's Interest Coverage for the fiscal year that ended in Oct. 2023 is calculated as

Here, for the fiscal year that ended in Oct. 2023, HP's Interest Expense was $-548 Mil. Its Operating Income was $4,223 Mil. And its Long-Term Debt & Capital Lease Obligation was $10,079 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Oct. 2023 )	/	Interest Expense (A: Oct. 2023 )
	=	-1	*	4223	/	-548
	=	7.71

HP's Interest Coverage for the quarter that ended in Jan. 2024 is calculated as

Here, for the three months ended in Jan. 2024, HP's Interest Expense was $-116 Mil. Its Operating Income was $1,025 Mil. And its Long-Term Debt & Capital Lease Obligation was $10,116 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Jan. 2024 )	/	Interest Expense (Q: Jan. 2024 )
	=	-1	*	1025	/	-116
	=	8.84

The higher the ratio, the stronger the company's Financial Strength is.

HP (NYSE:HPQ) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

HP Interest Coverage Related Terms

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HP (HPQ) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Hardware » HP Inc (NYSE:HPQ) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

HPQ:Mexico 1HPQ:Italy 7HP:Germany 7HP:Germany 7HP:Germany 7HP:Germany HPQB34:Brazil HPQ:Austria HPQ:Argentina

Address

1501 Page Mill Road, Palo Alto, CA, USA, 94304

Website

https://www.hp.com

HP (formerly Hewlett-Packard) is a behemoth in the PC and printing markets. It has focused on these markets since it exited IT infrastructure in 2015 with the split from Hewlett Packard Enterprise. HP focuses on the commercial market, but maintains sales of consumer devices and printers. The firm has a broad and global customer base, with only one third of sales coming from the U.S. It completely outsources manufacturing and relies heavily on channel partners for its sales and marketing.

Executives

Enrique Lores	officer: President, PSS	3000 HANOVER STREET, PALO ALTO CA 94304
Alex Cho	officer: President, Personal Systems	HP, 1501 PAGE MILL ROAD, PALO ALTO CA 94304
David W Meline	director	3M COMPANY, 3M OFFICE OF GENERAL COUNSEL, ST PAUL MN 55144-1000
Berkshire Hathaway Inc	10 percent owner	3555 FARNAM STREET, OMAHA NE 68131
Marie Myers	officer: Global Controller, HFS & PAO	3000 HANOVER STREET, PALO ALTO CA 94304
Subra Suresh	director	HP, 1501 PAGE MILL RD BLDG 5, PALO ALTO CA 94036
David P. Mcquarrie	officer: Chief Commercial Officer	C/O HP INC., 1501 PAGE MILL RD, PALO ALTO CA 94304
Shumeet Banerji	director	C/O HEWLETT-PACKARD COMPANY, 3000 HANOVER STREET, PALO ALTO CA 94304
Jonathan P Faust	officer: Global Controller	C/O HP INC, 1501 PAGE MILL ROAD, PALO ALTO CA 94304
Tuan Tran	officer: Pres Imaging Prtng & Solutions	1501 PAGE MILL ROAD, PALO ALTO CA 94304
Julie M Jacobs	officer: Chief Legal Officer and GC	22000 AOL WAY, DULLES VA 20166
Kristen M Ludgate	officer: Chief People Officer	3M COMPANY OFFICE OF GENERAL COUNSEL, 3M CENTER, ST. PAUL MN 55144-1000
Rucker Kim K.w.	director	KRAFT FOODS GROUP, INC., THREE LAKES DRIVE, NORTHFIELD IL 60093
Richard L Clemmer	director	P O BOX 34552, LAS VEGAS NV 89129
Judith A Miscik	director	300 RENAISSANCE CENTER, M/C: 482-C24-A68, DETROIT MI 48265