Home Depot Swot Analysis Essay
The Home Depot, Inc. (Home Depot) is the retailer of home improvement products. Financial performance, liquidity position, multi-channel selling and multiple categories are the company’s major strengths, whereas debt and inventory turnover ratio remain major areas of concern. In the future, stringent regulations, expansion by competitor and foreign exchange risks could affect the business performance. However, expanding retail market in the US, expanding e-commerce industry in the US, and focus on customer-centric business model are likely to offer growth opportunities to the company.
Strength – Financial Performance: Home Depot exhibited an increase in the financial performance during the review period. Strong financial performance enables the company’s ability to provide higher returns to its shareholders and increases its ability to allocate adequate funds for future growth initiatives. In FY2017, the company generated revenues of US$94,595 million as compared to US$88,519 million in FY2016, with an overall growth of 5.6% over FY2016. The company also exhibited an increase in operating income by 14% from US$11,774 million in FY2016 to US$13,427 million in FY2017. Its net income increased by 13.5% to US$7,957 million in FY2017 from US$7,009 million in FY2016.
Strength – Multi-Channel Selling: Home
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(Wal-Mart), which reported value of 8.4 for the same period. With the given turnover ratio, Home Depot takes 74 days to sale its inventory as compared to 43 days by Wal-Mart. Lower inventory turnover than competitors indicate that the company takes mores days to clear its inventory in comparison with its competitors. The decline in the turnover ratio and higher inventory turnover days signify that the company incurs high inventory costs, which affect its operating
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