posted by mark
on Tue, 11/17/2020 - 14:36
Home Depot has been doing well for a while. That's great, but how much more financial leverage can they inject into their business to goose returns.
In 2014, they had a LT Debt to total capitalization ratio of 54%. HD's 2020 fiscal year ended January 31 of 2020. At yearend 2020, their LT Debt to total capitalization ratio was 98.5%!
Yes, you read that right 98.5%! That means that equity is only 1.5% of capitalization. There isn't but a pinch of slack to leverage returns higher.
While HD is a great company, I would say that their leverage is just a smidgen high.
And the band played on!
