Home Depot Inc (HD)
Activity ratios
Short-term
Turnover ratios
| Jan 31, 2025 | Jan 31, 2024 | Jan 28, 2024 | Jan 31, 2023 | Jan 29, 2023 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.53 | 4.85 | 4.85 | 4.20 | 4.20 |
| Receivables turnover | — | — | 45.87 | — | 47.45 |
| Payables turnover | — | — | 10.13 | — | 9.14 |
| Working capital turnover | 52.78 | 19.67 | 19.67 | 16.81 | 16.81 |
Home Depot Inc's activity ratios provide insights into how efficiently the company manages its assets and liabilities.
1. Inventory Turnover: This ratio indicates how many times the company's inventory is sold and replaced within a specific period. Home Depot's inventory turnover has been relatively stable, increasing from 4.20 in January 2023 and 2024 to 4.85 in January 2025. A higher turnover indicates efficient inventory management and faster sales.
2. Receivables Turnover: This ratio measures how effectively the company collects payments from its customers. Home Depot's receivables turnover was 47.45 in January 2023 and 45.87 in January 2024, indicating that the company efficiently collects payments from customers. The absence of data for January 31, 2023, and 2024 could suggest that Home Depot does not extend credit to customers or has a quick turnover cycle.
3. Payables Turnover: This ratio reflects how efficiently the company pays its suppliers. Home Depot's payables turnover increased from 9.14 in January 2023 to 10.13 in January 2024. A higher turnover indicates that the company is paying its suppliers more frequently, possibly benefiting from favorable credit terms.
4. Working Capital Turnover: This ratio shows how effectively the company generates revenue from its working capital. Home Depot's working capital turnover improved significantly from 16.81 in January 2023 and 2024 to 52.78 in January 2025. A higher turnover implies efficient utilization of working capital to drive sales and revenue.
Overall, Home Depot Inc's activity ratios suggest that the company effectively manages its assets and liabilities to support its operations and drive revenue growth.
Average number of days
| Jan 31, 2025 | Jan 31, 2024 | Jan 28, 2024 | Jan 31, 2023 | Jan 29, 2023 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 80.59 | 75.28 | 75.28 | 86.82 | 86.82 |
| Days of sales outstanding (DSO) | days | — | — | 7.96 | — | 7.69 |
| Number of days of payables | days | — | — | 36.02 | — | 39.92 |
The activity ratios for Home Depot Inc provide insights into the efficiency in managing its inventory, accounts receivable, and accounts payable.
1. Days of Inventory on Hand (DOH):
- In January 2023 and 2024, Home Depot had 86.82 days of inventory on hand.
- By January 2025, the days of inventory decreased to 80.59 days.
- The downward trend indicates an improvement in inventory management efficiency as the company is reducing the number of days it holds inventory on hand.
2. Days of Sales Outstanding (DSO):
- In January 2023 and 2024, the days of sales outstanding were not provided (denoted as "— days").
- By January 2025, the DSO remained unreported.
- The lack of data for DSO makes it challenging to assess the efficiency of the company in collecting accounts receivable.
3. Number of Days of Payables:
- In January 2023 and 2024, the number of days of payables was not provided (denoted as "— days").
- By January 2025, the days of payables remained unreported.
- Similar to DSO, the absence of data for the number of days of payables limits the assessment of how effectively Home Depot manages its accounts payable.
Overall, while the improvement in inventory turnover is a positive sign, the limited data for DSO and payables days hinders a comprehensive evaluation of Home Depot's overall activity ratio performance.
See also:
Long-term
| Jan 31, 2025 | Jan 31, 2024 | Jan 28, 2024 | Jan 31, 2023 | Jan 29, 2023 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 5.84 | 4.83 | 6.14 |
| Total asset turnover | 1.66 | 1.99 | 1.99 | 2.06 | 2.06 |
The Fixed Asset Turnover ratio for Home Depot Inc has shown some fluctuations over the years, with values of 6.14 in January 2023, 4.83 in January 2023, 5.84 in January 2024, and no data (indicated by "—") for January 2024 and January 2025. This ratio measures how efficiently the company generates revenue from its fixed assets, such as property, plant, and equipment. A higher ratio indicates better utilization of fixed assets to generate sales.
On the other hand, the Total Asset Turnover ratio has remained relatively stable over the same period, with values of 2.06 in January 2023 and January 2023, decreasing to 1.99 in January 2024 and maintaining the same level in January 2024. In January 2025, this ratio decreased further to 1.66. This ratio evaluates how effectively the company utilizes all its assets to generate sales. A higher ratio implies that the company is efficient in generating sales relative to its total assets.
Overall, the Fixed Asset Turnover ratio shows varying efficiency in generating sales from fixed assets, while the Total Asset Turnover ratio indicates a slight decrease in the effectiveness of generating sales from all assets over the years. These ratios provide insights into Home Depot Inc's operational performance and asset utilization, which can be valuable for investors and analysts assessing the company's long-term activity efficiency.