Asset Breakdown
30 B
Assets Non Current
19.1 B
Current Assets
| Total Assets | 49.06 Billion | |
| Current Assets | 19.1 Billion | |
| Assets Non Current | 29.96 Billion | |
| Goodwill | 2.29 Billion |
Thinking to sell Home Depot (NYSE:HD) based on its current debt commitments?
 | By Ellen Johnson | Macroaxis Story |
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.
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Reviewed by Michael Smolkin
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 Home 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 Home 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 positionHow 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. Financial leverage can amplify the potential profits to Home Depot's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Home Depot's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Home Depot's total debt and its cash.
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.
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