Home Depot Inc (HD)
Solvency ratios
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | — | 0.00 | — |
| Debt-to-equity ratio | 0.00 | 0.00 | — | 0.00 | — |
| Financial leverage ratio | 73.30 | 48.94 | — | 21.39 | — |
Home Depot Inc's solvency ratios indicate a consistently strong financial position over the past five years. The debt-to-assets, debt-to-capital, and debt-to-equity ratios have all been at 0.00, suggesting that the company has minimal debt relative to its assets and equity. This signifies a low level of financial risk and indicates that Home Depot has predominantly financed its operations through equity and retained earnings rather than debt.
The financial leverage ratio, on the other hand, has shown an increasing trend, from 21.39 in 2021 to 73.30 in 2024. This indicates that the company's reliance on debt to finance its operations has grown over the years. While an increasing leverage ratio can signal increased risk, it could also be a strategic decision to take advantage of low-interest rates to fund growth opportunities.
Overall, Home Depot Inc's solvency ratios demonstrate a stable and robust financial position, with low debt levels relative to assets and equity. However, the increasing financial leverage ratio suggests a shift towards higher debt financing, which should be monitored for implications on the company's overall financial health.
Coverage ratios
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 11.25 | 14.90 | 17.14 | 13.60 | 13.25 |
The interest coverage ratio of Home Depot Inc has shown a general declining trend over the past five years. In January 2024, the interest coverage ratio was 11.25, indicating a decrease from the previous year where it was 14.90. This suggests that the company's ability to cover its interest expenses with its operating income has weakened. However, it is important to note that despite the decline, the interest coverage ratio in 2024 is still relatively healthy at over 10, indicating that Home Depot Inc can comfortably fulfill its interest obligations. Further analysis would be required to understand the factors contributing to this trend and assess the overall financial health of the company.