Stock Analysis on Net

Home Depot Inc. (NYSE:HD)

Analysis of Short-term (Operating) Activity Ratios

Microsoft Excel

Short-term Activity Ratios (Summary)

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

Microsoft Excel
Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Turnover Ratios
Inventory turnover 4.85 4.20 4.55 5.25 5.00 5.10
Receivables turnover 45.87 47.45 44.12 44.15 52.34 55.89
Payables turnover 10.13 9.14 7.45 7.52 9.33 9.16
Working capital turnover 19.67 16.81 417.56 24.87 76.81 59.68
Average No. Days
Average inventory processing period 75 87 80 70 73 72
Add: Average receivable collection period 8 8 8 8 7 7
Operating cycle 83 95 88 78 80 79
Less: Average payables payment period 36 40 49 49 39 40
Cash conversion cycle 47 55 39 29 41 39

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Home Depot Inc. inventory turnover ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.
Receivables turnover An activity ratio equal to revenue divided by receivables. Home Depot Inc. receivables turnover ratio improved from 2022 to 2023 but then slightly deteriorated from 2023 to 2024.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Home Depot Inc. payables turnover ratio increased from 2022 to 2023 and from 2023 to 2024.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Home Depot Inc. working capital turnover ratio deteriorated from 2022 to 2023 but then slightly improved from 2023 to 2024.

Short-term activity 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. number of days of inventory outstanding deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Home Depot Inc. operating cycle deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.
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. number of days of payables outstanding decreased from 2022 to 2023 and from 2023 to 2024.
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.

Inventory Turnover

Home Depot Inc., inventory turnover calculation, comparison to benchmarks

Microsoft Excel
Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Selected Financial Data (US$ in millions)
Cost of sales 101,709 104,625 100,325 87,257 72,653 71,043
Merchandise inventories 20,976 24,886 22,068 16,627 14,531 13,925
Short-term Activity Ratio
Inventory turnover1 4.85 4.20 4.55 5.25 5.00 5.10
Benchmarks
Inventory Turnover, Competitors2
Amazon.com Inc. 9.15 8.40 8.34 9.80 8.08
Lowe’s Cos. Inc. 3.50 3.65 3.71 3.73 3.85
TJX Cos. Inc. 6.21 5.82 5.66 6.13 6.08
Inventory Turnover, Sector
Consumer Discretionary Distribution & Retail 6.18 6.10 6.36 6.83 6.07
Inventory Turnover, Industry
Consumer Discretionary 7.06 6.74 7.06 7.55 7.84

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

1 2024 Calculation
Inventory turnover = Cost of sales ÷ Merchandise inventories
= 101,709 ÷ 20,976 = 4.85

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Home Depot Inc. inventory turnover ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

Receivables Turnover

Home Depot Inc., receivables turnover calculation, comparison to benchmarks

Microsoft Excel
Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Selected Financial Data (US$ in millions)
Net sales 152,669 157,403 151,157 132,110 110,225 108,203
Receivables, net 3,328 3,317 3,426 2,992 2,106 1,936
Short-term Activity Ratio
Receivables turnover1 45.87 47.45 44.12 44.15 52.34 55.89
Benchmarks
Receivables Turnover, Competitors2
Amazon.com Inc. 16.86 19.32 23.26 26.09 22.26
Lowe’s Cos. Inc.
TJX Cos. Inc. 88.70 93.79 69.69 108.00 112.54
Receivables Turnover, Sector
Consumer Discretionary Distribution & Retail 23.15 26.52 30.59 35.28 33.53
Receivables Turnover, Industry
Consumer Discretionary 17.99 18.02 21.14 21.80 21.73

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

1 2024 Calculation
Receivables turnover = Net sales ÷ Receivables, net
= 152,669 ÷ 3,328 = 45.87

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Home Depot Inc. receivables turnover ratio improved from 2022 to 2023 but then slightly deteriorated from 2023 to 2024.

Payables Turnover

Home Depot Inc., payables turnover calculation, comparison to benchmarks

Microsoft Excel
Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Selected Financial Data (US$ in millions)
Cost of sales 101,709 104,625 100,325 87,257 72,653 71,043
Accounts payable 10,037 11,443 13,462 11,606 7,787 7,755
Short-term Activity Ratio
Payables turnover1 10.13 9.14 7.45 7.52 9.33 9.16
Benchmarks
Payables Turnover, Competitors2
Amazon.com Inc. 3.59 3.63 3.46 3.22 3.51
Lowe’s Cos. Inc. 6.16 5.65 5.51 6.42 5.85
TJX Cos. Inc. 9.53 7.77 5.09 11.17 10.53
Payables Turnover, Sector
Consumer Discretionary Distribution & Retail 4.61 4.48 4.19 4.25 4.75
Payables Turnover, Industry
Consumer Discretionary 5.23 4.84 4.67 4.77 5.59

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

1 2024 Calculation
Payables turnover = Cost of sales ÷ Accounts payable
= 101,709 ÷ 10,037 = 10.13

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Home Depot Inc. payables turnover ratio increased from 2022 to 2023 and from 2023 to 2024.

Working Capital Turnover

Home Depot Inc., working capital turnover calculation, comparison to benchmarks

Microsoft Excel
Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Selected Financial Data (US$ in millions)
Current assets 29,775 32,471 29,055 28,477 19,810 18,529
Less: Current liabilities 22,015 23,110 28,693 23,166 18,375 16,716
Working capital 7,760 9,361 362 5,311 1,435 1,813
 
Net sales 152,669 157,403 151,157 132,110 110,225 108,203
Short-term Activity Ratio
Working capital turnover1 19.67 16.81 417.56 24.87 76.81 59.68
Benchmarks
Working Capital Turnover, Competitors2
Amazon.com Inc. 77.32 24.33 60.82 32.92
Lowe’s Cos. Inc. 50.26 245.54 24.92 530.50
TJX Cos. Inc. 23.22 17.40 6.51 23.97 13.27
Working Capital Turnover, Sector
Consumer Discretionary Distribution & Retail 42.11 21.83 63.17 38.37
Working Capital Turnover, Industry
Consumer Discretionary 16.27 19.61 11.06 13.40 33.38

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

1 2024 Calculation
Working capital turnover = Net sales ÷ Working capital
= 152,669 ÷ 7,760 = 19.67

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Home Depot Inc. working capital turnover ratio deteriorated from 2022 to 2023 but then slightly improved from 2023 to 2024.

Average Inventory Processing Period

Home Depot Inc., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel
Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Selected Financial Data
Inventory turnover 4.85 4.20 4.55 5.25 5.00 5.10
Short-term Activity Ratio (no. days)
Average inventory processing period1 75 87 80 70 73 72
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
Amazon.com Inc. 40 43 44 37 45
Lowe’s Cos. Inc. 104 100 98 98 95
TJX Cos. Inc. 59 63 65 60 60
Average Inventory Processing Period, Sector
Consumer Discretionary Distribution & Retail 59 60 57 53 60
Average Inventory Processing Period, Industry
Consumer Discretionary 52 54 52 48 47

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

1 2024 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 4.85 = 75

2 Click competitor name to see calculations.

Short-term activity 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. number of days of inventory outstanding deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

Average Receivable Collection Period

Home Depot Inc., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel
Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Selected Financial Data
Receivables turnover 45.87 47.45 44.12 44.15 52.34 55.89
Short-term Activity Ratio (no. days)
Average receivable collection period1 8 8 8 8 7 7
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
Amazon.com Inc. 22 19 16 14 16
Lowe’s Cos. Inc.
TJX Cos. Inc. 4 4 5 3 3
Average Receivable Collection Period, Sector
Consumer Discretionary Distribution & Retail 16 14 12 10 11
Average Receivable Collection Period, Industry
Consumer Discretionary 20 20 17 17 17

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

1 2024 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 45.87 = 8

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover.

Operating Cycle

Home Depot Inc., operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Selected Financial Data
Average inventory processing period 75 87 80 70 73 72
Average receivable collection period 8 8 8 8 7 7
Short-term Activity Ratio
Operating cycle1 83 95 88 78 80 79
Benchmarks
Operating Cycle, Competitors2
Amazon.com Inc. 62 62 60 51 61
Lowe’s Cos. Inc.
TJX Cos. Inc. 63 67 70 63 63
Operating Cycle, Sector
Consumer Discretionary Distribution & Retail 75 74 69 63 71
Operating Cycle, Industry
Consumer Discretionary 72 74 69 65 64

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

1 2024 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 75 + 8 = 83

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Home Depot Inc. operating cycle deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

Average Payables Payment Period

Home Depot Inc., average payables payment period calculation, comparison to benchmarks

Microsoft Excel
Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Selected Financial Data
Payables turnover 10.13 9.14 7.45 7.52 9.33 9.16
Short-term Activity Ratio (no. days)
Average payables payment period1 36 40 49 49 39 40
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
Amazon.com Inc. 102 101 105 113 104
Lowe’s Cos. Inc. 59 65 66 57 62
TJX Cos. Inc. 38 47 72 33 35
Average Payables Payment Period, Sector
Consumer Discretionary Distribution & Retail 79 81 87 86 77
Average Payables Payment Period, Industry
Consumer Discretionary 70 75 78 76 65

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

1 2024 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 10.13 = 36

2 Click competitor name to see calculations.

Short-term activity 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. number of days of payables outstanding decreased from 2022 to 2023 and from 2023 to 2024.

Cash Conversion Cycle

Home Depot Inc., cash conversion cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Selected Financial Data
Average inventory processing period 75 87 80 70 73 72
Average receivable collection period 8 8 8 8 7 7
Average payables payment period 36 40 49 49 39 40
Short-term Activity Ratio
Cash conversion cycle1 47 55 39 29 41 39
Benchmarks
Cash Conversion Cycle, Competitors2
Amazon.com Inc. -40 -39 -45 -62 -43
Lowe’s Cos. Inc.
TJX Cos. Inc. 25 20 -2 30 28
Cash Conversion Cycle, Sector
Consumer Discretionary Distribution & Retail -4 -7 -18 -23 -6
Cash Conversion Cycle, Industry
Consumer Discretionary 2 -1 -9 -11 -1

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

1 2024 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 75 + 836 = 47

2 Click competitor name to see calculations.

Short-term activity 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.