Some fundamental drivers such as market cap or Home Depot enterprice value can be analyzed from historical prospective to project value of the company into the future. Some investors analyze Home Depot valuation indicators such as Average Assets of 50.7 B or Earnings Before Interest Taxes and Depreciation Amortization EBITDA of 17.5 B to time the market or to short-sell their positions based on the trend in valuation ratios. It is a perfect tool to project the direction of Home Depot future value. Financial Statement Analysis is much more than just reviewing and breaking down Home Depot prevalent accounting reports in order to predict its past. Macroaxis encourages investors to analyze financial statement over time for various trends across multiple indicators and accounts to determine whether Home Depot is a good buy for the upcoming year. Please also check Risk vs Return Analysis.
Enterprise Value (or EV) is usually referred to as Home Depot theoretical takeover price. In the event of an acquisition, an acquirer would have to take on Home Depot debt, but would also pocket its cash. Enterprise Value is more accurate representation of Home Depot value then its market capitalization because it takes into account all of The Home Depot existing debt. Enterprise value is a measure of the value of a business as a whole; calculated as Market Capitalization plus Total Debt USD minus Cash and Equivalents USD.
Market capitalization (or market cap) is the total value of the shares outstanding of The Home Depot. It is equal to Home Depot current share price times the number of Home Depot outstanding shares. Represents the product of Total Shares (Basic) ; Adjusted Share Price and Entity Share Factor.
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