DR HORTON Model, Scenario of Shock and Recovery

Predict, Not Extrapolate.

We establish a basic model for DHI based on 6-years of financial reports. The company shows a 6% perpetual cash growth rate under extended constant condition scenario. Key factor includes inventory sales ratio on 1-year old inventory, for which the critical transition level is 87% vs. 100% current. The scenario of a 4-year shock on sales and financing is applied and the minimal response required for survival and the minimal time it will take to recover to pre-shock level are derived.

DHI Model and Scenario on Shock and Recovery (38 downloads)

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