Stock analysis on net
Export to Excel Export to OpenOffice.org Print

Home Depot Inc. (HD) | Short-term (Operating) Activity Analysis

Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.


Ratios (Summary)

Home Depot Inc., short-term (operating) activity ratios

Export to Excel Export to OpenOffice.org
    Feb 3, 2013 Jan 29, 2012 Jan 30, 2011 Jan 31, 2010 Feb 1, 2009 Feb 3, 2008
  Turnover Ratios
Inventory turnover 6.98 6.82 6.40 6.50 6.68 6.59
Receivables turnover 53.59 56.54 62.67 68.65 73.34 61.44
Payables turnover 13.91 14.50 14.42 13.61 14.78 13.49
Working capital turnover 19.12 13.68 20.26 18.71 32.27 39.30
  Average No. of Days
Average inventory processing period 52 54 57 56 55 55
Add: Average receivable collection period 7 6 6 5 5 6
Operating cycle 59 60 63 62 60 61
Less: Average payables payment period 26 25 25 27 25 27
Cash conversion cycle 33 35 38 35 35 34

Source: Based on data from Home Depot Inc. Annual Reports

Ratio Description The company
Inventory turnover An activity ratio calculated as revenue divided by inventory. Home Depot Inc.'s inventory turnover improved from 2011 to 2012 and from 2012 to 2013.
Receivables turnover An activity ratio equal to revenue divided by receivables. Home Depot Inc.'s receivables turnover deteriorated from 2011 to 2012 and from 2012 to 2013.
Payables turnover An activity ratio calculated as revenue divided by payables. Home Depot Inc.'s payables turnover increased from 2011 to 2012 but then declined significantly from 2012 to 2013.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Home Depot Inc.'s working capital turnover deteriorated from 2011 to 2012 but then improved from 2012 to 2013 not reaching 2011 level.
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Home Depot Inc.'s average inventory processing period improved from 2011 to 2012 and from 2012 to 2013.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnoverd. Home Depot Inc.'s average receivable collection period deteriorated from 2011 to 2012 and from 2012 to 2013.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Home Depot Inc.'s operating cycle improved from 2011 to 2012 and from 2012 to 2013.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Home Depot Inc.'s average payables payment period declined from 2011 to 2012 but then increased from 2012 to 2013 exceeding 2011 level.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Home Depot Inc.'s cash conversion cycle improved from 2011 to 2012 and from 2012 to 2013.

Top

Inventory Turnover

Export to Excel Export to OpenOffice.org
    Feb 3, 2013 Jan 29, 2012 Jan 30, 2011 Jan 31, 2010 Feb 1, 2009 Feb 3, 2008
  Selected Financial Data (USD $ in millions)
Net sales 74,754  70,395  67,997  66,176  71,288  77,349 
Merchandise inventories 10,710  10,325  10,625  10,188  10,673  11,731 
  Inventory Turnover, Comparison to Industry
Home Depot Inc.1 6.98 6.82 6.40 6.50 6.68 6.59
  Industry, Consumer Services – 10.54 10.50 10.51 10.45 10.21

Source: Based on data from Home Depot Inc. Annual Reports

2013 Calculations

1 Inventory turnover = Net sales ÷ Merchandise inventories
= 74,754 ÷ 10,710 = 6.98

Ratio Description The company
Inventory turnover An activity ratio calculated as revenue divided by inventory. Home Depot Inc.'s inventory turnover improved from 2011 to 2012 and from 2012 to 2013.

Top

Receivables Turnover

Export to Excel Export to OpenOffice.org
    Feb 3, 2013 Jan 29, 2012 Jan 30, 2011 Jan 31, 2010 Feb 1, 2009 Feb 3, 2008
  Selected Financial Data (USD $ in millions)
Net sales 74,754  70,395  67,997  66,176  71,288  77,349 
Receivables, net 1,395  1,245  1,085  964  972  1,259 
  Receivables Turnover, Comparison to Industry
Home Depot Inc.1 53.59 56.54 62.67 68.65 73.34 61.44
  Industry, Consumer Services – 29.36 29.72 31.92 34.58 32.09

Source: Based on data from Home Depot Inc. Annual Reports

2013 Calculations

1 Receivables turnover = Net sales ÷ Receivables, net
= 74,754 ÷ 1,395 = 53.59

Ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Home Depot Inc.'s receivables turnover deteriorated from 2011 to 2012 and from 2012 to 2013.

Top

Payables Turnover

Export to Excel Export to OpenOffice.org
    Feb 3, 2013 Jan 29, 2012 Jan 30, 2011 Jan 31, 2010 Feb 1, 2009 Feb 3, 2008
  Selected Financial Data (USD $ in millions)
Net sales 74,754  70,395  67,997  66,176  71,288  77,349 
Accounts payable 5,376  4,856  4,717  4,863  4,822  5,732 
  Payables Turnover, Comparison to Industry
Home Depot Inc.1 13.91 14.50 14.42 13.61 14.78 13.49
  Industry, Consumer Services – 13.55 13.57 13.77 14.55 13.47

Source: Based on data from Home Depot Inc. Annual Reports

2013 Calculations

1 Payables turnover = Net sales ÷ Accounts payable
= 74,754 ÷ 5,376 = 13.91

Ratio Description The company
Payables turnover An activity ratio calculated as revenue divided by payables. Home Depot Inc.'s payables turnover increased from 2011 to 2012 but then declined significantly from 2012 to 2013.

Top

Working Capital Turnover

Export to Excel Export to OpenOffice.org
    Feb 3, 2013 Jan 29, 2012 Jan 30, 2011 Jan 31, 2010 Feb 1, 2009 Feb 3, 2008
  Selected Financial Data (USD $ in millions)
Current assets 15,372  14,520  13,479  13,900  13,362  14,674 
Less: Current liabilities 11,462  9,376  10,122  10,363  11,153  12,706 
Working capital 3,910  5,144  3,357  3,537  2,209  1,968 
Net sales 74,754  70,395  67,997  66,176  71,288  77,349 
  Working Capital Turnover, Comparison to Industry
Home Depot Inc.1 19.12 13.68 20.26 18.71 32.27 39.30
  Industry, Consumer Services – 59.27 36.23 35.35 38.82 93.08

Source: Based on data from Home Depot Inc. Annual Reports

2013 Calculations

1 Working capital turnover = Net sales ÷ Working capital
= 74,754 ÷ 3,910 = 19.12

Ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Home Depot Inc.'s working capital turnover deteriorated from 2011 to 2012 but then improved from 2012 to 2013 not reaching 2011 level.

Top

Average Inventory Processing Period

Export to Excel Export to OpenOffice.org
    Feb 3, 2013 Jan 29, 2012 Jan 30, 2011 Jan 31, 2010 Feb 1, 2009 Feb 3, 2008
  Selected Financial Data
Inventory turnover 6.98 6.82 6.40 6.50 6.68 6.59
  Average Inventory Processing Period (no. of days), Comparison to Industry
Home Depot Inc.1 52 54 57 56 55 55
  Industry, Consumer Services – 35 35 35 35 36

Source: Based on data from Home Depot Inc. Annual Reports

2013 Calculations

1 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 6.98 = 52

Ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Home Depot Inc.'s average inventory processing period improved from 2011 to 2012 and from 2012 to 2013.

Top

Average Receivable Collection Period

Export to Excel Export to OpenOffice.org
    Feb 3, 2013 Jan 29, 2012 Jan 30, 2011 Jan 31, 2010 Feb 1, 2009 Feb 3, 2008
  Selected Financial Data
Receivables turnover 53.59 56.54 62.67 68.65 73.34 61.44
  Average Receivable Collection Period (no. of days), Comparison to Industry
Home Depot Inc.1 7 6 6 5 5 6
  Industry, Consumer Services – 12 12 11 11 11

Source: Based on data from Home Depot Inc. Annual Reports

2013 Calculations

1 Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 53.59 = 7

Ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnoverd. Home Depot Inc.'s average receivable collection period deteriorated from 2011 to 2012 and from 2012 to 2013.

Top

Operating Cycle

No. of days

Export to Excel Export to OpenOffice.org
    Feb 3, 2013 Jan 29, 2012 Jan 30, 2011 Jan 31, 2010 Feb 1, 2009 Feb 3, 2008
  Selected Financial Data
Average inventory processing period 52 54 57 56 55 55
Average receivable collection period 7 6 6 5 5 6
  Operating Cycle, Comparison to Industry
Home Depot Inc.1 59 60 63 62 60 61
  Industry, Consumer Services – 47 47 46 45 47

Source: Based on data from Home Depot Inc. Annual Reports

2013 Calculations

1 Operating cycle = Average inventory processing period + Average receivable collection period
= 52 + 7 = 59

Ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Home Depot Inc.'s operating cycle improved from 2011 to 2012 and from 2012 to 2013.

Top

Average Payables Payment Period

Export to Excel Export to OpenOffice.org
    Feb 3, 2013 Jan 29, 2012 Jan 30, 2011 Jan 31, 2010 Feb 1, 2009 Feb 3, 2008
  Selected Financial Data
Payables turnover 13.91 14.50 14.42 13.61 14.78 13.49
  Average Payables Payment Period (no. of days), Comparison to Industry
Home Depot Inc.1 26 25 25 27 25 27
  Industry, Consumer Services – 27 27 27 25 27

Source: Based on data from Home Depot Inc. Annual Reports

2013 Calculations

1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 13.91 = 26

Ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Home Depot Inc.'s average payables payment period declined from 2011 to 2012 but then increased from 2012 to 2013 exceeding 2011 level.

Top

Cash Conversion Cycle

No. of days

Export to Excel Export to OpenOffice.org
    Feb 3, 2013 Jan 29, 2012 Jan 30, 2011 Jan 31, 2010 Feb 1, 2009 Feb 3, 2008
  Selected Financial Data
Average inventory processing period 52 54 57 56 55 55
Average receivable collection period 7 6 6 5 5 6
Average payables payment period 26 25 25 27 25 27
  Cash Conversion Cycle, Comparison to Industry
Home Depot Inc.1 33 35 38 35 35 34
  Industry, Consumer Services – 20 20 20 20 20

Source: Based on data from Home Depot Inc. Annual Reports

2013 Calculations

1 Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 52 + 7 – 26 = 33

Ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Home Depot Inc.'s cash conversion cycle improved from 2011 to 2012 and from 2012 to 2013.

Top