Hewlett-Packard Company reports that its "operations are organized into three segments for financial reporting purposes: Personal Systems, Printing and Corporate Investments" with the last segment encompassing HP Labs and incubation projects. The company provides the following information about these business segments:

a. Calculate the 2017 return on capital employed for each segment. (Base the calculation on total assets instead of net operating assets in the denominator. HP does not disclose operating assets and liabilities by segment.)

b. Which segment is more profitable? Which is growing more quickly?

c. The Corporate Investments segment is dwarfed by the other two reporting segments. Why would HP's management want to keep Corporate Investments separate rather than combining it with one of the others?

Transcribed Image Text:

($ millions) 2017 2016 Total net revenues Personal systems... Printing. Corporate investments $33,374 $29,987 ..... 18,801 18,260 8 7