Home Depot Inc (HD)

Quick ratio

		Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020
Cash	US$ in thousands	3,760,000	2,757,000	2,343,000	7,895,000	2,133,000
Short-term investments	US$ in thousands	—	—	—	—	—
Receivables	US$ in thousands	3,328,000	3,317,000	3,426,000	2,992,000	2,106,000
Total current liabilities	US$ in thousands	22,015,000	23,110,000	28,693,000	23,166,000	18,375,000
Quick ratio		0.32	0.26	0.20	0.47	0.23

January 28, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($3,760,000K + $—K + $3,328,000K) ÷ $22,015,000K
= 0.32

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations using its most liquid assets. A higher quick ratio indicates a stronger liquidity position.

Looking at the quick ratio of Home Depot Inc over the past five years, we can observe the following trends:

1. Jan 28, 2024: The quick ratio is 0.32, showing an improvement compared to the previous year.
2. Jan 29, 2023: The quick ratio was 0.26, indicating a slight increase from the previous year but still relatively low.
3. Jan 30, 2022: The quick ratio stands at 0.20, demonstrating a significant decrease compared to the previous year.
4. Jan 31, 2021: The quick ratio was 0.47, reflecting a strong liquidity position for the company.
5. Feb 2, 2020: The quick ratio was 0.23, showing a decline compared to the previous year.

Overall, Home Depot Inc's quick ratio has fluctuated over the past five years, with some years showing stronger liquidity positions than others. It is important to note that a quick ratio of less than 1 may indicate that the company may have difficulty meeting its short-term obligations without either selling inventory or obtaining additional financing. Investors and analysts should continue to monitor Home Depot Inc's liquidity position to ensure its ability to cover short-term liabilities.