Home Depot Inc (HD)

Payables turnover

		Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020
Cost of revenue	US$ in thousands	101,709,000	104,625,000	100,325,000	87,257,000	72,653,000
Payables	US$ in thousands	10,037,000	11,443,000	13,462,000	11,606,000	7,787,000
Payables turnover		10.13	9.14	7.45	7.52	9.33

January 28, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $101,709,000K ÷ $10,037,000K
= 10.13

The payables turnover ratio for Home Depot Inc has shown a generally increasing trend over the past five years, indicating more efficient management of trade payables.

In the most recent fiscal year, ending on January 28, 2024, the payables turnover ratio was 10.13, suggesting that the company paid off its trade payables approximately 10.13 times during the year. This represents an improvement compared to the previous year's ratio of 9.14.

The upward trend in the payables turnover ratio may be attributed to effective cash management practices, negotiation of favorable payment terms with suppliers, or improvements in inventory management. A higher payables turnover ratio typically indicates that a company is managing its payables more effectively, potentially benefiting from early payment discounts and maintaining strong relationships with suppliers.

Overall, the increasing trend in the payables turnover ratio for Home Depot Inc reflects positively on the company's liquidity and working capital management, as it suggests a more efficient utilization of resources in settling trade payables. This trend may also indicate a proactive approach to managing cash flows and optimizing working capital efficiency.