Home Depot Inc (HD)
Cash conversion cycle
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Jan 28, 2024 | Oct 31, 2023 | Oct 29, 2023 | Jul 31, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 31, 2023 | Jan 29, 2023 | Oct 31, 2022 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Apr 30, 2022 | Jan 31, 2022 | Jan 30, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 80.08 | 84.27 | 84.18 | 85.05 | 79.34 | 75.08 | 77.46 | 77.65 | 80.02 | 83.85 | 94.34 | 91.65 | 86.91 | 88.25 | 88.16 | 90.95 | 93.04 | 94.47 | 81.01 | 78.19 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | 7.93 | — | 8.93 | — | 9.22 | — | — | 7.69 | — | 8.49 | — | — | — | — | 8.08 |
| Number of days of payables | days | — | — | — | — | — | 35.92 | — | 39.08 | — | 43.63 | — | — | 39.96 | — | 42.51 | — | 56.52 | — | — | 47.70 |
| Cash conversion cycle | days | 80.08 | 84.27 | 84.18 | 85.05 | 79.34 | 47.08 | 77.46 | 47.50 | 80.02 | 49.45 | 94.34 | 91.65 | 54.64 | 88.25 | 54.14 | 90.95 | 36.52 | 94.47 | 81.01 | 38.57 |
January 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 80.08 + — – —
= 80.08
The cash conversion cycle of Home Depot Inc has shown fluctuations over the data period, ranging from a low of 36.52 days to a high of 94.47 days. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory into cash receipts from sales. A shorter cash conversion cycle indicates that the company is able to quickly convert its inventory into sales and then into cash, which is typically a positive indicator of operational efficiency.
Looking at the trend, we can observe that the cash conversion cycle has shown some variability over time, with periods of lower and higher values. For example, there were notable improvements in the cash conversion cycle in January 2022 and May 2022, where the days decreased significantly. However, there were also periods of increases in the cycle, such as April 2023 and January 2023, where the days increased.
Overall, it is important for Home Depot Inc to actively manage and monitor its cash conversion cycle to ensure efficient working capital management and maximize the cash flow from its operations. By analyzing the components of the cash conversion cycle, such as inventory turnover, accounts receivable days, and accounts payable days, the company can identify areas for improvement and optimize its cash flow processes.
Peer comparison
Jan 31, 2025