Home Depot Financial Statements and Financial Ratios Analyzed
Thanks for visiting my Home Depot Financial Report page. On this page, you will be able to find preliminary information about Home Depot's current financial performance as well as some historical track records and trends.
For a more detailed examination of Home Depot's financial performance, please check out the "Financial Report". In this report, written by myself, Paul Borosky, MBA., Doctoral Candidate, and published author, you will find:
- Summarized income statement for the last 5 years.
- Summarized balance sheet for the last 5 years.
- Summary analysis by myself of the important income statement, balance sheet, and financial ratio trends and other happenings.
- Five years’ worth of over twenty common financial ratios presented with formulas, calculations, and analysis tips for each ratio.
- Line by line description, explanation, and analysis tip for most financial statement line items and financial ratios.
- Professional financial analysis tips are provided in each section to help YOU conduct your OWN financial analysis!
- Each section includes an “in other words” segment. This is where I use plain English to explain concepts.
Enjoy the preliminary information and for a more detailed analysis, buy the financial report!
Sample Financial Report
Home Depot: Brief Summary
Home Depot has its headquarters in Atlanta, Georgia. The company competes in the consumer cyclical sector specifically in the home improvement retail industry. At present, the organization employs approximately 400,000 individuals. Home Depot generates most of the revenues from selling retail home improvement products to consumers and businesses. Popular home improvement items sold may include building materials, lawn and garden products, and other do-it-yourself supplies.
From a financial perspective, Home Depot has a market capitalization of approximately $285 billion. Their beta is 1.06. This indicates that Home Depot is slightly more risky of an investment as compared to the overall market. The company does pay dividends. At present, Home Depot’s dividend yield is approximately 2.26%. The organization 52-week stock range has fluctuated between $140.63 to $267.80.
Home Depot Financial Report Sources
“Home Depot 2019 Company Analysis… For Beginners: Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by, Paul Borosky, MBA. and owner of Quality Business Plan. In this report, I used Home Depot 2018 10k, 2017 10k annual report, 2016 10k annual report, 2015 10k annual report, and 2019 10k annual report as the basis for information gathering.
Section 1: Home Depot Income Statement Analyzed 2015 to 2019
In this section, I walk through a broad definition as to what an income statement is and why it is important. From this, I then discuss and define income statement line items, such as revenues, gross profits, etc. in detail. After each line item is defined and discussed, I finally offer a summary analysis of Home Depot's important income statement line item trends from 2015 to 2019, in most cases.
Home Depot Revenue Growth.
In 2015, Home Depot’s revenues were approximately $83.1 billion. In the next four years, the organization would continually grow the revenues ending 2019 with approximately $108 billion in revenues. Common sense would dictate that this type of trend should be commonplace with multinational organizations. However, this cannot be further from the truth. With this said, if the organization is able to continue their impressive 6.8% revenue growth annually, then the company should be well suited for long-term prosperity.
Home Depot Income Statement 2019
|R & D||-||-||-|
Section 2: Home Depot Balance Sheet Analyzed from 2015 to 2019
For the Home Depot balance sheet, I again go through each important line item from the balance sheet. In reviewing each line item, I will define their balance sheet line item, such as cash, property, plant and equipment, and liabilities between 2015 to 2019. Next, I then offer a summary analysis of their important balance sheet line items.
Home Depot Accounts Receivable.
In 2015, Home Depot had an Accounts Receivable of approximately $1.4 billion. In my opinion, their Accounts Receivable is probably funds waiting to be paid by commercial accounts. In the next two years, the organization would increase its Accounts Receivable ending 2017 with approximately $2 billion. In the next two years, their Accounts Receivable would slightly fall ending 2015 with $1.9 billion. The leveling off of Accounts Receivable indicates that the company may be dealing less with or at least not growing their commercial accounts as much as they are with their retail sales. For investors, if this segment of the organization starts to decline, then total revenues meet not be far off.
Home Depot Summary Balance Sheet 2019
|Short Term Investment|
|LT Debt - Current||1,056||1,202||542||77||38|
|Total Current Liabilities||16,716||16,194||14,133||12,524||11,269|
|Total Equity & Liability||44,003||44,529||42,966||41,973||39,946|
Section 3: Home Depot Financial Ratios Analyzed from 2015 to 2019
For this section, I have chosen several different financial ratios to review for Home Depot from 2015 to 2019. In reviewing each of their financial ratios, I first start with defining the financial ratio. Next, I supply the financial formula for calculating the specific ratio. Finally, I offer a brief analysis of their important Financial ratios.
Home Depot Current Ratio.
Home Depot’s current ratio ended 2015 at 1.36. In the next four years, the organization would continuously reduce its current ratio ending 2019 at 1.11. Because the organization does receive significant cash influx on a daily basis, having a current ratio at .8 or .9 may indicate optimal usage of short-term assets. From this lens, investors may consider a 1.11 current ratio as not optimal.
Home Depot Total Asset Turnover.
Home Depot had a total asset turnover in 2015 of 2.08. In the next four years, the organization would increase its total asset turnover in 2019 at 2.46. This indicates that the company is continually finding ways to improve or rather make money on its assets. As with other segments of their financials, Home Depot seems to be doing an excellent job with this ratio.
Home Depot Return on Assets.
Home Depot had a return on assets of 15.88% in 2015. In the next four years, the organization would increase its return on assets to 25.27% in 2019. The above-average growth and return on assets is a similar trend as other ratios for the organization. Just another reason why this organization may be an advisable investment.
Home Depot Debt ratio.
Home Depot ended 2015 with a debt ratio of 4.62%. For a multinational organization, this debt ratio is significantly low. When an organization has such a low debt ratio, the firm is missing out on tax write off opportunities as well as making money on borrowed money. In the next four years, the company would increase its debt ratio substantially ending 2019 at 60.92%. It seems like the organization went from one extreme to another.
Home Depot Liquidity Ratios 2019
|Net Working Capital||8,367||9,357|
Home Depot Asset Utilization 2019
|Total Asset Turnover||2.46||2.27|
|Fixed Asset Turnover||4.84||4.57|
|Days Sales Outstanding||6.53||7.06|
|Accounts Receivable Turnover||55.89||51.69|
|Working Capital Turnover||12.93||10.78|
|Average Days Inventory||0.02||0.02|
|Average Days Payable||0.04||0.04|
Home Depot Profitability Ratios 2019
|Return on Assets||25.27%||19.38%|
|Return on Equity||-592.17%||593.54%|
|Net Profit Margin||10.28%||8.55%|
|Gross Profit Margin||34.34%||34.05%|
|Operating Profit Margin||14.35%||14.55%|
|Basic Earning Power||35.29%||32.97%|
Home Depot Long-term Debt 2019
|Times Interest Earned||14.78||13.89|