Home Depot Inc (HD)

Working capital turnover

		Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020
Revenue	US$ in thousands	152,669,000	157,403,000	151,157,000	132,110,000	110,225,000
Total current assets	US$ in thousands	29,775,000	32,471,000	29,055,000	28,477,000	19,810,000
Total current liabilities	US$ in thousands	22,015,000	23,110,000	28,693,000	23,166,000	18,375,000
Working capital turnover		19.67	16.81	417.56	24.87	76.81

January 28, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $152,669,000K ÷ ($29,775,000K – $22,015,000K)
= 19.67

The working capital turnover ratio for Home Depot Inc has fluctuated over the past five years, as shown in the data provided. In fiscal year 2022, the working capital turnover ratio spiked to an unusually high level of 417.56, indicating that the company may have efficiently utilized its working capital to generate sales during that period. This sudden increase could be due to specific factors such as inventory management, accounts receivable collection, or payables management.

In contrast, the working capital turnover ratios for the other years have been more moderate, ranging from 16.81 to 76.81. These ratios suggest that Home Depot Inc has generally been able to effectively use its working capital to support its operations and generate revenue. A higher working capital turnover ratio typically indicates that the company is managing its working capital efficiently, while a lower ratio may signal that the company is not using its working capital as effectively.

Overall, the working capital turnover ratio provides insights into how effectively Home Depot Inc is managing its working capital to drive sales and operational activities. Investors and analysts can use this ratio to assess the company's operational efficiency and financial performance over time.