Home Depot vs. Ace Hardware
Summary of Financial Ratios

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Home Depot
Ace Hardware
Revenue Recognition
Inventory Valuation
Investment Securities
Derivative Instruments
Presentation of Comprehensive Income
Stock Option Plan
Financial Ratios
Summary of Financial Ratios

Current Ratio
The current ratio for Home Depot is 1.77 and for Ace Hardware it is 1.28. This means that Home Depot has a greater chance of satisfying the short term obligations with the resources on hand. Ace Hardware might face difficulty in paying the debt because the ratio is closer to one.

Gross Profit Ratio
The gross profit ratio measures the difference between the net sales and the cost of goods sold of a company. Home Depot has a gross profit of 29.91% and Ace Hardware has a gross profit of 9.49%.

Net Margin
The net margin measures net income generated by each dollar of sales. The net margin for Home Depot is 5.64%, which indicates that 5.64% of each dollar of the revenue ends up as profit. The net margin for Ace Hardware is
2.73%, which means that 2.73% of each dollar value of the revenue ends up as profit.

Inventory Turnover
The inventory turnover ratio measures the number of times on average the inventory was sold during the period. The purpose of this ratio is to measure the liquidity of the inventory. The inventory turnover for Home Depot is 4.889, which means that the inventory turnover is approximately 75 days. The ratio for Ace Hardware is 6.739, which indicates that the inventory turnover is approximately 54 days.

Accounts Receivable Turnover
The accounts receivable turnover ratio measures the number of times, on average, receivables are collected during the period. The purpose of this ratio is to measure the liquidity of the receivables. The accounts receivable turnover ratio for Home Depot is 54.776, which states that the receivables are approximately collected after a period of 6 days. This information shows that Home Depot is very successful in collecting its receivables. The turnover ratio for Ace Hardware is 7.86. This means that there receivables are collected after a period of 46 days, which isn't nearly as good as Home Depot.

Price Earnings Ratio
The price earnings ratio measures the ratio of the market price pershare to earnings per share. Home Depot has a current price earnings ratio of 36.5%. Ace Hardware does not have a current price earnings ratio because there was not enough informtion to compute one.