The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. It is calculated as a company's Total Current Assets excludes Total Inventories divides by its Total Current Liabilities. The Home Depot's quick ratio for the quarter that ended in Oct. 2024 was 0.31.
The Home Depot has a quick ratio of 0.31. It indicates that the company cannot currently fully pay back its current liabilities.
The historical rank and industry rank for The Home Depot's Quick Ratio or its related term are showing as below:
NEOE:HD'
s Quick Ratio Range Over the Past 10 Years
Min: 0.24 Med: 0.37 Max: 0.74
Current: 0.31
During the past 13 years, The Home Depot's highest Quick Ratio was 0.74. The lowest was 0.24. And the median was 0.37.
NEOE:HD's Quick Ratio is ranked worse than 85.19% of 1121
companies
in the Retail - Cyclical industry
Industry Median: 0.85
vs NEOE:HD: 0.31
The Home Depot Quick Ratio Historical Data
The historical data trend for The Home Depot's Quick Ratio can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of The Home Depot's Quick Ratio
For the Home Improvement Retail subindustry, The Home Depot's Quick Ratio, along with its competitors' market caps and Quick Ratio data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
The Home Depot's Quick Ratio Distribution in the Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, The Home Depot's Quick Ratio distribution charts can be found below:
* The bar in red indicates where The Home Depot's Quick Ratio falls into.
The Home Depot Quick Ratio Calculation
The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. For this reason, the ratio excludes inventories from current assets.
The Home Depot's Quick Ratio for the fiscal year that ended in Jan. 2024 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
The Home Depot (NEOE:HD) Quick Ratio Explanation
The quick ratio is more conservative than the Current Ratio because it excludes inventories from current assets. The ratio derives its name presumably from the fact that assets such as cash and marketable securities are quick sources of cash. Inventories generally take time to be converted into cash, and if they have to be sold quickly, the company may have to accept a lower price than book value of these inventories. As a result, they are justifiably excluded from assets that are ready sources of immediate cash.
In general, low or decreasing quick ratios generally suggest that a company is over-leveraged, struggling to maintain or grow sales, paying bills too quickly or collecting receivables too slowly. On the other hand, a high or increasing quick ratio generally indicates that a company is experiencing solid top-line growth, quickly converting receivables into cash, and easily able to cover its financial obligations. Such companies often have faster inventory turnover and cash conversion cycles.
The higher the quick ratio, the better the company's liquidity position.
The Home Depot Quick Ratio Related Terms
Thank you for viewing the detailed overview of The Home Depot's Quick Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Home Depot is the world's largest home improvement specialty retailer, operating more than 2,300 warehouse-format stores offering more than 30,000 products in store and 1 million products online in the US, Canada, and Mexico. Its stores offer numerous building materials, home improvement products, lawn and garden products, and decor products and provide various services, including home improvement installation services and tool and equipment rentals. The acquisition of Interline Brands in 2015 allowed Home Depot to enter the MRO business, which has been expanded through the tie-up with HD Supply (2020). The additions of the Company Store brought textiles to the lineup, and the recent tie-up with SRS will help grow professional demand in roofing, pool and landscaping projects.
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