Home Depot Earnings before Tax vs Invested Capital Analysis

HD -- USA Stock  

USD 179.85  0.59  0.33%

Home Depot financial indicator trend analysis is much more than just examining The Home Depot latest accounting drivers to predict future trends. We encourage investors to analyze account correlations over time for multiple indicators to determine whether The Home Depot is a good investment. Please check the relationship between Home Depot Earnings before Tax and its Invested Capital accounts. Please also check Risk vs Return Analysis.

Earnings before Tax vs Invested Capital

Accounts Relationship

Earnings before Tax vs Invested Capital

Significance: Strong Relationship

Overlapping area represents amount of trend that can be explained by analyzing historical patterns of The Home Depot Earnings before Tax account and Invested Capital

Correlation Coefficient

0.7
Relationship DirectionPositive 
Relationship StrengthSignificant

Earnings before Tax

Earnings Before Tax is calculated by adding Income Tax Expense back to Net Income.

Invested Capital

Invested capital represents the total cash investment that shareholders and debt holders have contributed to The Home Depot. There are two different methods for calculating The Home Depot invested capital: operating approach and financing approach. Understanding ##company1# invested capital allows investors to calculate measures of performance such as return on invested capital or return on capital employed. Invested capital is an input into the calculation of Return on Invested Capital; and is calculated as: Total Debt plus Total Assets minus Goodwill and Intangible Assets minus Cash and Equivalents minus Current Liabilities. Please note this calculation method is subject to change.

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