Home Depot Beneish M Score

HD
 Stock
  

USD 317.50  2.88  0.90%   

This module uses fundamental data of Home Depot to approximate the value of its Beneish M Score. Home Depot M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Please check Home Depot Piotroski F Score and Home Depot Altman Z Score analysis.
  
Home Depot Debt Non Current is projected to increase significantly based on the last few years of reporting. The past year's Debt Non Current was at 41.96 Billion. The current year Issuance Repayment of Debt Securities is expected to grow to about 3.5 B, whereas Debt Current is forecasted to decline to about 3.5 B. The current year Long Term Debt to Equity is expected to grow to 10.54. The current year Debt to Equity Ratio is expected to grow to 10.96
At this time, it appears that Home Depot is an unlikely manipulator. The earnings manipulation may begin if Home Depot's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Home Depot executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Home Depot's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.26
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.0Focus
Asset Quality1.0Focus
Expense Coverage1.05Focus
Gross Margin Strengs1.06Focus
Accruals Factor1.05Focus
Depreciation Resistance1.05Focus
Net Sales Growth0.99Focus
Financial Leverage Condition0.97Focus

Home Depot Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Home Depot's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Selling General and Administrative Expense26.2 B25.4 B
Sufficiently Up
Increasing
Slightly volatile
Revenues149.1 B151.2 B
Fairly Down
Increasing
Slightly volatile
Trade and Non Trade Receivables3.4 B3.4 B
Fairly Down
Increasing
Slightly volatile
Property Plant and Equipment Net32.5 B31.2 B
Sufficiently Up
Increasing
Slightly volatile
Operating Income21.7 B23 B
Notably Down
Increasing
Slightly volatile
Net Cash Flow from Operations18.6 B16.6 B
Moderately Up
Increasing
Slightly volatile
Liabilities Non Current46.8 B44.9 B
Sufficiently Up
Increasing
Slightly volatile
Current Liabilities27.3 B28.7 B
Notably Down
Increasing
Slightly volatile
Total Liabilities74.1 B73.6 B
Slightly Up
Increasing
Slightly volatile
Investments Non Current120.8 M121.5 M
Slightly Down
Decreasing
Slightly volatile
Investments120.8 M121.5 M
Slightly Down
Decreasing
Slightly volatile
Gross Margin35.5733.6286
Notably Up
Decreasing
Slightly volatile
Depreciation Amortization and Accretion2.8 B2.9 B
Fairly Down
Increasing
Slightly volatile
Debt Non Current43.8 B42 B
Sufficiently Up
Increasing
Slightly volatile
Debt Current3.5 B4.3 B
Significantly Down
Increasing
Slightly volatile
Total Debt47.2 B46.3 B
Fairly Up
Increasing
Slightly volatile
Assets Non Current44.7 B42.8 B
Sufficiently Up
Increasing
Slightly volatile
Current Assets30.3 B29.1 B
Sufficiently Up
Increasing
Slightly volatile
Total Assets75 B71.9 B
Sufficiently Up
Increasing
Slightly volatile

Home Depot Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Home Depot's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Home Depot in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Home Depot's degree of accounting gimmicks and manipulations.

About Home Depot Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Deferred Revenue

3.38 Billion

Home Depot Deferred Revenue is projected to increase significantly based on the last few years of reporting. The past year's Deferred Revenue was at 3.6 Billion

Home Depot ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Home Depot's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Home Depot's managers, analysts, and investors.
Environment Score
Governance Score
Social Score

About Home Depot Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Home Depot's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Home Depot using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Home Depot based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
The Home Depot, Inc. operates as a home improvement retailer. The Home Depot, Inc. was incorporated in 1978 and is based in Atlanta, Georgia. Home Depot operates under Home Improvement Retail classification in the United States and is traded on New York Stock Exchange. It employs 500000 people.

Home Depot Investors Sentiment

The influence of Home Depot's investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in Home Depot. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock markets does not have a solid backing from leading economists and market statisticians.
Investor biases related to Home Depot's public news can be used to forecast risks associated with investment in Home Depot. The trend in average sentiment can be used to explain how an investor holding Home Depot can time the market purely based on public headlines and social activities around Home Depot. Please note that most equiteis that are difficult to arbitrage are affected by market sentiment the most.
Home Depot's market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Home Depot's and other traded tickers. The bigger the bubble, the more accurate is the estimated score. Higher bars for a given day show more participation in the average Home Depot's news discussions. The higher the estimated score, the more favorable is the investor's outlook on Home Depot.

Home Depot Implied Volatility

    
  37.58  
Home Depot's implied volatility exposes the market's sentiment of Home Depot stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Home Depot's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Home Depot stock will not fluctuate a lot when Home Depot's options are near their expiration.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Home Depot in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Home Depot's short interest history, or implied volatility extrapolated from Home Depot options trading.

Becoming a Better Investor with Macroaxis

Macroaxis puts the power of mathematics on your side. We analyze your portfolios and positions such as Home Depot using complex mathematical models and algorithms, but make them easy to understand. There is no real person involved in your portfolio analysis. We perform a number of calculations to compute absolute and relative portfolio volatility, correlation between your assets, value at risk, expected return as well as over 100 different fundamental and technical indicators.

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Please check Home Depot Piotroski F Score and Home Depot Altman Z Score analysis. Note that the Home Depot information on this page should be used as a complementary analysis to other Home Depot's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

Complementary Tools for Home Depot Stock analysis

When running Home Depot price analysis, check to measure Home Depot's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Home Depot is operating at the current time. Most of Home Depot's value examination focuses on studying past and present price action to predict the probability of Home Depot's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Home Depot's price. Additionally, you may evaluate how the addition of Home Depot to your portfolios can decrease your overall portfolio volatility.
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Is Home Depot's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Home Depot. If investors know Home Depot will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Home Depot listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
0.082
Market Capitalization
326.2 B
Quarterly Revenue Growth YOY
0.056
Return On Assets
0.2
Return On Equity
0.15
The market value of Home Depot is measured differently than its book value, which is the value of Home Depot that is recorded on the company's balance sheet. Investors also form their own opinion of Home Depot's value that differs from its market value or its book value, called intrinsic value, which is Home Depot's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Home Depot's market value can be influenced by many factors that don't directly affect Home Depot's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Home Depot's value and its price as these two are different measures arrived at by different means. Investors typically determine Home Depot value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Home Depot's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.