HD Home Depot stock Story

HD -  USA Stock  

USD 302.61  0.51  0.17%

Home Depot is scheduled to announce its earnings today. The next earnings report is expected on the 23rd of February 2021. While many traders are getting carried away by overanalyzing consumer cyclical space, it is reasonable to digest Home Depot as an investment alternative. Here we also measure the ability of Home Depot to meet its long-term debt obligations, such as interest payments on debt, the final principal payment on the debt, and any other fixed obligations like lease payments.
Published over six months ago
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Thinking to sell Home Depot (NYSE:HD) based on its current debt commitments?
The company reports 40.57 B of total liabilities with total debt to equity ratio (D/E) of 3.31, which may imply that Home Depot relies heavily on debt financing. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Home Depot has an asset utilization ratio of 284.28 percent. This indicates that the company is making $2.84 for each dollar of assets. An increasing asset utilization means that Home Depot is more efficient with each dollar of assets it utilizes for everyday operations.
Home Depot financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Home Depot, including all of Home Depot's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Home Depot assets, the company is considered highly leveraged. Understanding the composition and structure of overall Home Depot debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.
Please read more on our technical analysis page.

Understanding HD Home Depot Total Liabilities

Home Depot liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Home Depot has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Home Depot balance sheet include debt obligations and money owed to different Home Depot vendors, workers, and loan providers. Below is the chart of HD Home Depot short long-term liabilities accounts currently reported on its balance sheet.
You can use Home Depot financial leverage analysis tool to get a better grip on understanding its financial position

How important is Home Depot's Liquidity

Home Depot financial leverage refers to using borrowed capital as a funding source to finance Home Depot ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Home Depot financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Home Depot's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for Home Depot, but it might be worth checking our own buy vs. sell analysis

Is Home Depot valued correctly by the market?

Home Depot generated the yearly revenue of 119.32 B. Reported Net Income was 11.83 B with gross profit of 37.57 B.

Asset Breakdown

30 B
Assets Non Current
19.1 B
Current Assets
Total Assets49.06 Billion
Current Assets19.1 Billion
Assets Non Current29.96 Billion
Goodwill2.29 Billion

Will Home Depot price dip impact its balance sheet?

Latest Jensen Alpha is up to -0.04. Price may dip again. Home Depot exhibits very low volatility with skewness of -0.67 and kurtosis of 1.14. However, we advise investors to further study Home Depot technical indicators to make sure all market info is available and is reliable.

Our Final Perspective on Home Depot

When is the right time to buy or sell Home Depot? Buying stocks such as Home Depot isn't very hard. However, what challenging for most investors is doing it at the right time. Proper market timing is something most people cannot do without sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily bases. With a relatively neutral outlook on the latest economy, it is better to hold off any trading of Home Depot as the current risk-reward utility is not appealing enough. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Home Depot.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Home Depot. Please refer to our Terms of Use for any information regarding our disclosure principles.

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