Home depot financial ratios. Home Depot, Inc. (The) (HD): annual reports and key ratios comparison (quarterly) 2022-10-14

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Home Depot is a well-known home improvement retailer that operates in the United States, Canada, and Mexico. The company has a long history of financial success and has consistently delivered strong financial results for its shareholders. One way to analyze the financial health of a company is to look at its financial ratios, which provide insight into a company's performance, liquidity, solvency, efficiency, and profitability. In this essay, we will examine some key financial ratios for Home Depot and discuss what they tell us about the company.

One important financial ratio for any company is the price-to-earnings (P/E) ratio, which measures the relationship between a company's stock price and its earnings per share (EPS). A high P/E ratio indicates that investors are willing to pay a premium for the company's earnings, while a low P/E ratio suggests that the company's earnings are not considered particularly valuable. As of the end of 2021, Home Depot had a P/E ratio of 22.6, which is relatively high compared to the industry average of 19.5. This suggests that investors are optimistic about the company's future earnings potential and are willing to pay a premium for its stock.

Another important financial ratio for any retailer is the inventory turnover ratio, which measures how quickly a company is able to sell its inventory. A high inventory turnover ratio indicates that the company is able to sell its products quickly and efficiently, while a low ratio suggests that the company may be having difficulty moving its inventory. Home Depot has an inventory turnover ratio of 5.4, which is relatively high compared to the industry average of 4.3. This suggests that the company is able to sell its inventory relatively quickly and efficiently.

The debt-to-equity (D/E) ratio is another important financial ratio that measures the balance between a company's debt and equity. A high D/E ratio indicates that the company is heavily reliant on debt to finance its operations, while a low D/E ratio suggests that the company has a strong balance sheet with a greater reliance on equity. Home Depot has a D/E ratio of 1.3, which is relatively low compared to the industry average of 1.7. This suggests that the company has a strong balance sheet and is not heavily reliant on debt to finance its operations.

The return on assets (ROA) ratio is a measure of a company's profitability, which is calculated by dividing the company's net income by its total assets. A high ROA ratio indicates that the company is generating a lot of income relative to its assets, while a low ROA ratio suggests that the company may be underperforming. Home Depot has an ROA ratio of 12.9%, which is relatively high compared to the industry average of 10.4%. This suggests that the company is generating a lot of income relative to its assets and is therefore highly profitable.

Overall, the financial ratios for Home Depot indicate that the company is financially healthy and performing well. The company has a high P/E ratio, indicating that investors are optimistic about its future earnings potential. Its inventory turnover ratio is relatively high, suggesting that the company is able to sell its products quickly and efficiently. The company has a low D/E ratio, indicating a strong balance sheet with a greater reliance on equity. Finally, the company has a high ROA ratio, suggesting that it is highly profitable. All of these factors contribute to the company's financial success and make it a solid investment for shareholders.

Home Depot Inc Financial Strength Comparisons to Industry Sector and S&P

home depot financial ratios

As a result of the analysis of the key financial ratios of the company, we have established the following. With this said, if the organization is able to continue their impressive 6. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. DIY Customers: These customers are usually homeowners, who prefer purchasing products and completing installations on their own. The in 2022 is about the same as the financial condition typical of the companies engaged in the activity "Lumber and Other Building Materials Dealers" The same conclusion can be made when comparing the ratios of the Company with the averages for all U. Avoid profanity, slander or personal attacksdirected at an author or another user.

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Home Depot (HD) Financial Ratios

home depot financial ratios

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing. Change value during the period between open outcry settle and the commencement of the next day's trading is calculated as the difference between the last trade and the prior day's settle. At present, the organization employs approximately 400,000 individuals. This indicates that Home Depot is slightly more risky of an investment as compared to the overall market. The information obtained from such show how well the business operates in terms of clearing the debts and making profits at the same time Epstein et al. It seems like the organization went from one extreme to another.

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Home Depot, Inc. (The) (HD): annual reports and key ratios comparison

home depot financial ratios

Even negative opinions can be framed positively and diplomatically. Home Depot had a total asset turnover in 2015 of 2. The in 2022 is about the same as the financial condition typical of the companies engaged in the activity "Lumber and Other Building Materials Dealers" The average ratios for this industry are slightly better than the averages for all industries. Common sense would dictate that this type of trend should be commonplace with multinational organizations. This will result in immediate suspension of the commentor and his or her account. Calculations and summary conclusions are made in a computerized way using software and methods developed by Consulting financial and analytical company Ankon. Home DepotFinancial ratios are relationships based on a company's financial information.

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The Home Depot, Inc. (HD) Valuation Measures & Financial Statistics

home depot financial ratios

The company typically serves three primary customer groups: Do-It-Yourself, Do-It-For-Me, Professional Customers. Copyright © FactSet Research Systems Inc. In the next four years, the organization would increase its total asset turnover in 2019 at 2. Sources: FactSet, Dow Jones Bonds: Bond quotes are updated in real-time. Company's financial ratios are compared with the median values of ratios of all companies and of companies within the same industry, and also with the quartiles of those ratios.

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Home Depot Historical Financial Ratios Analysis

home depot financial ratios

Performance of such can furthermore be analyzed through management assessment and financial reports that are presented in the form of financial ratios, vertical analysis and the trend of such ventures. Improvement in the operating profit margin has also been noted recently due to the improvement in revenue against the ever-reducing operating income. The financial condition of Home Depot, Inc. Home Depot Debt ratio. For a multinational organization, this debt ratio is significantly low. During the analysis we have compared the key financial ratios of the company with the average median values of those ratios calculated for the specific industry sector and for all industries.

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Home Depot's Financial Statement & Ratios Analysis

home depot financial ratios

Boston, Massachusetts: Cengage Learning. In reviewing each line item, I will define their balance sheet line item, such as cash, property, plant and equipment, and liabilities between 2015 to 2019. After each line item is defined and discussed, I finally offer a summary analysis of Home Depot's important income statement line item trends from 2015 to 2019, in most cases. Their beta is 1. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Therefore, many investors have minimal understanding of the risks and opportunities regarding the entity. For a more detailed examination of Home Depot's financial performance, please check out the "Financial Report".

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HD

home depot financial ratios

Lastly, the Home Depot Inc. Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. The above-average growth and return on assets is a similar trend as other ratios for the organization. Data may be intentionally delayed pursuant to supplier requirements. See Stock Movers: Gainers, decliners and most actives market activity tables are a combination of NYSE, Nasdaq, NYSE American and NYSE Arca listings. The company competes in the consumer cyclical sector specifically in the home improvement retail industry.

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Home Depot, Inc. (The) (HD): annual reports and key ratios comparison (quarterly)

home depot financial ratios

On the other hand, looking into the entire matrix of fundamentals ratios, and analyzing their relationships over time can provide a more complete picture of the company financial strength now and in the future. However, this cannot be further from the truth. Next, I supply the financial formula for calculating the specific ratio. For investors, if this segment of the organization starts to decline, then total revenues meet not be far off. This essay elaborates on the extent to which the management assessment of the financial conditions agrees with the financial statement paper 1.

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