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The Home Depot Financial Strength

: 5 (As of Apr. 2022)
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The Home Depot has the Financial Strength Rank of 5.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

The Home Depot's Interest Coverage for the quarter that ended in Apr. 2022 was 15.94. The Home Depot's debt to revenue ratio for the quarter that ended in Apr. 2022 was 0.31. As of today, The Home Depot's Altman Z-Score is 6.81.


Competitive Comparison

For the Home Improvement Retail subindustry, The Home Depot's Financial Strength, along with its competitors' market caps and Financial Strength 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 Financial Strength Distribution

For the Retail - Cyclical industry and Consumer Cyclical sector, The Home Depot's Financial Strength distribution charts can be found below:

* The bar in red indicates where The Home Depot's Financial Strength falls into.



The Home Depot Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

The Home Depot's Interest Expense for the months ended in Apr. 2022 was $-372 Mil. Its Operating Income for the months ended in Apr. 2022 was $5,929 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Apr. 2022 was $44,493 Mil.

The Home Depot's Interest Coverage for the quarter that ended in Apr. 2022 is

Interest Coverage=-1*Operating Income (Q: Apr. 2022 )/Interest Expense (Q: Apr. 2022 )
=-1*5929/-372
=15.94

The higher the ratio, the stronger the company's financial strength is.

2. Debt to revenue ratio. The lower, the better.

The Home Depot's Debt to Revenue Ratio for the quarter that ended in Apr. 2022 is

Debt to Revenue Ratio=Total Debt (Q: Apr. 2022 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(3322 + 44493) / 155632
=0.31

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

The Home Depot has a Z-score of 6.81, indicating it is in Safe Zones. This implies the Z-Score is strong.

Good Sign:

Altman Z-score of 6.81 is strong.

* 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  (NYSE:HD) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

The Home Depot has the Financial Strength Rank of 5.


The Home Depot Financial Strength Related Terms

Thank you for viewing the detailed overview of The Home Depot's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.


The Home Depot Business Description

The Home Depot logo
Address
2455 Paces Ferry Road, Atlanta, GA, USA, 30339
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 United States, 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 distributor Interline Brands in 2015 allowed Home Depot to enter the maintenance, repair, and operations business, which has been expanded through the tie-up with HD Supply (2020). The addition of the Company Store brought textile exposure to Home Depot's lineup.
Executives
Siddiqui Fahim officer: EVP and CIO 2455 PACES FERRY RD., SE ATLANTA GA 30339
Santilli Paula director PEPSICO, INC., 700 ANDERSON HILL ROAD PURCHASE NY 10577
Seidman Becker Caryn director 65 EAST 55TH STREET, 17TH FLOOR NEW YORK NY 10022
Deaton John A. officer: EVP - Supply Chain & Prod. Dev 2455 PACES FERRY RD., SE ATLANTA GA 30339
Arpey Gerard J director 4333 AMON CARTER BLVD FORT WORTH TX 76155
Gooden Linda R director LOCKHEED MARTIN CORPORATION 6801 ROCKLEDGE DRIVE BETHESDA MD 20817
Brenneman Gregory D director
Linnartz Stephanie director 10400 FERNWOOD ROAD BETHESDA MD 20817
Boyd Jeffery H director C/O ASPEN GROVE CAPITAL, LLC PO BOX 9389 AVON CO 81620
Bousbib Ari director UNITED TECHNOLOGIES CORP ONE FINANCIAL PLAZA HARTFORD CT 06101
Foulkes Helena director ONE CVS DRIVE WOONSOCKET RI 02895
Carey Albert P director PEPSICO, INC. 700 ANDERSON HILL ROAD PURCHASE NY 10577
Kadre Manuel director 2020 SALZEDO STREET, SUITE 301 CORAL GABLES FL 33134
Brown J Frank director PARK AVENUE PLAZA 55 EAST 52ND STREET NEW YORK NY 10055
Hewett Wayne M. director 5 WESTBROOK CORPORATE CENTER WESTCHESTER IL 60154

The Home Depot Headlines

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