Microsoft Excel LibreOffice Calc

Home Depot Inc. (HD)


Long-term Debt and Solvency Analysis

Difficulty: Beginner


Ratios (Summary)

Home Depot Inc., debt and solvency ratios

Microsoft Excel LibreOffice Calc
Feb 3, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Feb 1, 2015 Feb 2, 2014
Debt to equity 18.59 5.45 3.37 1.84 1.18
Debt to capital 1.07 0.95 0.84 0.77 0.65 0.54
Interest coverage 14.85 13.96 13.85 12.99 13.02 12.91

Based on: 10-K (filing date: 2019-03-28), 10-K (filing date: 2018-03-22), 10-K (filing date: 2017-03-23), 10-K (filing date: 2016-03-24), 10-K (filing date: 2015-03-26), 10-K (filing date: 2014-03-27).

Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders’ equity. Home Depot Inc.’s debt-to-equity ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. Home Depot Inc.’s debt-to-capital ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Home Depot Inc.’s interest coverage ratio improved from 2017 to 2018 and from 2018 to 2019.

Debt to Equity

Home Depot Inc., debt to equity calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Feb 3, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Feb 1, 2015 Feb 2, 2014
Selected Financial Data (USD $ in millions)
Short-term debt 1,339  1,559  710  350  290  – 
Current installments of long-term debt 1,056  1,202  542  77  38  33 
Long-term debt, excluding current installments 26,807  24,267  22,349  20,888  16,869  14,691 
Total debt 29,202  27,028  23,601  21,315  17,197  14,724 
Stockholders’ equity (deficit) (1,878) 1,454  4,333  6,316  9,322  12,522 
Ratio
Debt to equity1 18.59 5.45 3.37 1.84 1.18
Benchmarks
Debt to Equity, Competitors
Amazon.com Inc. 1.13 1.59 1.06 1.31 1.50
Costco Wholesale Corp. 0.51 0.62 0.43 0.58 0.41
eBay Inc. 1.47 1.24 0.85 1.03 0.38
Lowe’s Cos. Inc. 4.45 2.89 2.44 1.65 1.14 0.89
Netflix Inc. 1.98 1.81 1.26 1.07 0.48
Target Corp. 1.00 0.99 1.16 0.98 0.91 0.85
TJX Cos. Inc. 0.44 0.43 0.49 0.38 0.38 0.30
Walmart Inc. 0.80 0.60 0.59 0.62 0.62 0.74
Debt to Equity, Sector
General Retailers 1.06 1.09 0.87 0.83 0.76
Debt to Equity, Industry
Consumer Services 1.26 1.07 0.97 0.92 0.74

Based on: 10-K (filing date: 2019-03-28), 10-K (filing date: 2018-03-22), 10-K (filing date: 2017-03-23), 10-K (filing date: 2016-03-24), 10-K (filing date: 2015-03-26), 10-K (filing date: 2014-03-27).

2019 Calculations

1 Debt to equity = Total debt ÷ Stockholders’ equity (deficit)
= 29,202 ÷ -1,878 =

Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders’ equity. Home Depot Inc.’s debt-to-equity ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Debt to Capital

Home Depot Inc., debt to capital calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Feb 3, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Feb 1, 2015 Feb 2, 2014
Selected Financial Data (USD $ in millions)
Short-term debt 1,339  1,559  710  350  290  – 
Current installments of long-term debt 1,056  1,202  542  77  38  33 
Long-term debt, excluding current installments 26,807  24,267  22,349  20,888  16,869  14,691 
Total debt 29,202  27,028  23,601  21,315  17,197  14,724 
Stockholders’ equity (deficit) (1,878) 1,454  4,333  6,316  9,322  12,522 
Total capital 27,324  28,482  27,934  27,631  26,519  27,246 
Ratio
Debt to capital1 1.07 0.95 0.84 0.77 0.65 0.54
Benchmarks
Debt to Capital, Competitors
Amazon.com Inc. 0.53 0.61 0.51 0.57 0.60
Costco Wholesale Corp. 0.34 0.38 0.30 0.37 0.29
eBay Inc. 0.60 0.55 0.46 0.51 0.28
Lowe’s Cos. Inc. 0.82 0.74 0.71 0.62 0.53 0.47
Netflix Inc. 0.66 0.64 0.56 0.52 0.33
Target Corp. 0.50 0.50 0.54 0.50 0.48 0.46
TJX Cos. Inc. 0.31 0.30 0.33 0.27 0.28 0.23
Walmart Inc. 0.44 0.37 0.37 0.38 0.38 0.43
Debt to Capital, Sector
General Retailers 0.51 0.52 0.47 0.45 0.43
Debt to Capital, Industry
Consumer Services 0.56 0.52 0.49 0.48 0.42

Based on: 10-K (filing date: 2019-03-28), 10-K (filing date: 2018-03-22), 10-K (filing date: 2017-03-23), 10-K (filing date: 2016-03-24), 10-K (filing date: 2015-03-26), 10-K (filing date: 2014-03-27).

2019 Calculations

1 Debt to capital = Total debt ÷ Total capital
= 29,202 ÷ 27,324 = 1.07

Ratio Description The company
Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. Home Depot Inc.’s debt-to-capital ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Interest Coverage

Home Depot Inc., interest coverage calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Feb 3, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Feb 1, 2015 Feb 2, 2014
Selected Financial Data (USD $ in millions)
Net earnings 11,121  8,630  7,957  7,009  6,345  5,385 
Add: Income tax expense 3,435  5,068  4,534  4,012  3,631  3,082 
Add: Interest expense 1,051  1,057  972  919  830  711 
Earnings before interest and tax (EBIT) 15,607  14,755  13,463  11,940  10,806  9,178 
Ratio
Interest coverage1 14.85 13.96 13.85 12.99 13.02 12.91
Benchmarks
Interest Coverage, Competitors
Amazon.com Inc. 8.95 5.48 8.84 4.37 0.65
Costco Wholesale Corp. 28.94 31.14 28.21 30.06 29.29
eBay Inc. 9.34 8.79 17.23 17.71 29.71
Lowe’s Cos. Inc. 6.29 9.60 9.04 9.06 9.30 8.75
Netflix Inc. 3.92 3.04 2.74 2.07 7.96
Target Corp. 8.97 6.47 4.95 9.11 5.14 3.76
TJX Cos. Inc. 65.36 60.98 61.37 61.70 65.10 73.02
Walmart Inc. 5.88 7.49 9.66 9.49 11.08 11.56
Interest Coverage, Sector
General Retailers 9.68 9.60 11.04 10.63 10.68
Interest Coverage, Industry
Consumer Services 7.28 8.41 9.20 10.09 10.04

Based on: 10-K (filing date: 2019-03-28), 10-K (filing date: 2018-03-22), 10-K (filing date: 2017-03-23), 10-K (filing date: 2016-03-24), 10-K (filing date: 2015-03-26), 10-K (filing date: 2014-03-27).

2019 Calculations

1 Interest coverage = EBIT ÷ Interest expense
= 15,607 ÷ 1,051 = 14.85

Ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Home Depot Inc.’s interest coverage ratio improved from 2017 to 2018 and from 2018 to 2019.