Home Depot (The)(Hd) Financials: Inventory Turnover Compared To Industry Average, Plus Other Key Ratios
Growth Trend (Last 5 Years)
Growth - inventory turnover
This chart shows the historical trend of inventory turnover for HD compared to its industry average over the recent years.
Ratio Definition and Interpretation
Name: Inventory Turnover
Definition: Inventory turnover measures how quickly the company sells and replaces its inventory. A higher turnover means products are selling fast and inventory isn’t sitting idle. Slow turnover may suggest weak sales, poor demand forecasting, or obsolete inventory piling up — all of which can tie up cash unnecessarily.
Interpretation:
• In '2022', HD's inventory turnover was 4.55, reflecting efficiency in managing inventory stock. Industry average for RETAIL: Building Materials in '2022' stood at 5.04.
• In '2023', HD's inventory turnover was 4.46, reflecting efficiency in managing inventory stock. The decline from '2022' may indicate some operational or financial challenges. Industry average for RETAIL: Building Materials in '2023' stood at 4.31. Industry average declined by 0.73 from previous year.
• In '2024', HD's inventory turnover was 4.44, reflecting efficiency in managing inventory stock. The decline from '2023' may indicate some operational or financial challenges. Industry average for RETAIL: Building Materials in '2024' stood at 4.48. Industry average increased by 0.17 compared to previous year.
• In '2025', HD's inventory turnover was 4.78, reflecting efficiency in managing inventory stock. The increase since '2024' reflects strengthening financial performance. Industry average for RETAIL: Building Materials in '2025' stood at 4.02. Industry average declined by 0.46 from previous year.
Overall, HD's inventory turnover has steadily improved over the past 4 years.
Formula: Inventory Turnover = Cost of Goods Sold / Average Inventory
Good Range: Typically 4 to 12 depending on industry.