In this boring Sunday, a provocation on Home Depot.
The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, notable return on equity and good cash flow from operations.
However there is an aspect that caught my attention, Home Depot has very weak liquidity. Currently, the Quick Ratio is 0.38 which clearly shows a lack of ability to cover short-term cash needs.
The stockholders' equity in 4Q has significantly decreased by 67% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop shortly.
It occurred immediately to me they have to pay $27 million to settle allegations in California that the retailer illegally disposed of hazardous waste and tossed customer records without first rendering personal information unreadable.
$27 million is nothing for Home Depot, assuming they are the only to pay...
The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, notable return on equity and good cash flow from operations.
However there is an aspect that caught my attention, Home Depot has very weak liquidity. Currently, the Quick Ratio is 0.38 which clearly shows a lack of ability to cover short-term cash needs.
The stockholders' equity in 4Q has significantly decreased by 67% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop shortly.
It occurred immediately to me they have to pay $27 million to settle allegations in California that the retailer illegally disposed of hazardous waste and tossed customer records without first rendering personal information unreadable.
$27 million is nothing for Home Depot, assuming they are the only to pay...