An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

Adjustments to Financial Statements for Operating Leases
Adjusted Financial Ratios for Operating Leases (Summary)
Adjusted Total Asset Turnover
Adjusted Debt to Equity
Adjusted Return on Assets (ROA)

Home Depot Inc., adjustments to financial statements

US$ in millions

	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020	Feb 3, 2019
Adjustment to Total Assets
Total assets (as reported)	76,530)	76,445)	71,876)	70,581)	51,236)	44,003)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	—)	—)	—)	—)	4,750)
Total assets (adjusted)	76,530)	76,445)	71,876)	70,581)	51,236)	48,753)
Adjustment to Total Debt
Total debt (as reported)	44,111)	43,193)	40,086)	37,238)	31,483)	29,202)
Add: Operating lease liability (before adoption of FASB Topic 842)²	—)	—)	—)	—)	—)	4,750)
Add: Current operating lease liabilities	1,050)	945)	830)	828)	828)	—)
Add: Long-term operating lease liabilities	7,082)	6,226)	5,353)	5,356)	5,066)	—)
Total debt (adjusted)	52,243)	50,364)	46,269)	43,422)	37,377)	33,952)

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

^{1, 2} Equal to total present value of future operating lease payments.

Home Depot Inc., Financial Data: Reported vs. Adjusted

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Home Depot Inc., adjusted financial ratios

	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020	Feb 3, 2019
Total Asset Turnover¹
Reported total asset turnover	1.99	2.06	2.10	1.87	2.15	2.46
Adjusted total asset turnover	1.99	2.06	2.10	1.87	2.15	2.22
Debt to Equity²
Reported debt to equity	42.25	27.65	—	11.29	—	—
Adjusted debt to equity	50.04	32.24	—	13.16	—	—
Return on Assets³ (ROA)
Reported ROA	19.79%	22.38%	22.86%	18.23%	21.94%	25.27%
Adjusted ROA	19.79%	22.38%	22.86%	18.23%	21.94%	22.81%

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

¹ See details »

² See details »

³ See details »

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Home Depot Inc. adjusted total asset turnover ratio deteriorated from 2022 to 2023 and from 2023 to 2024.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Home Depot Inc. adjusted ROA deteriorated from 2022 to 2023 and from 2023 to 2024.

Home Depot Inc., Financial Ratios: Reported vs. Adjusted

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	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020	Feb 3, 2019
As Reported
Selected Financial Data (US$ in millions)
Net sales	152,669)	157,403)	151,157)	132,110)	110,225)	108,203)
Total assets	76,530)	76,445)	71,876)	70,581)	51,236)	44,003)
Activity Ratio
Total asset turnover¹	1.99	2.06	2.10	1.87	2.15	2.46
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net sales	152,669)	157,403)	151,157)	132,110)	110,225)	108,203)
Adjusted total assets	76,530)	76,445)	71,876)	70,581)	51,236)	48,753)
Activity Ratio
Adjusted total asset turnover²	1.99	2.06	2.10	1.87	2.15	2.22

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

2024 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 152,669 ÷ 76,530 = 1.99

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 152,669 ÷ 76,530 = 1.99

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Home Depot Inc. adjusted total asset turnover ratio deteriorated from 2022 to 2023 and from 2023 to 2024.

	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020	Feb 3, 2019
As Reported
Selected Financial Data (US$ in millions)
Total debt	44,111)	43,193)	40,086)	37,238)	31,483)	29,202)
Stockholders’ equity (deficit)	1,044)	1,562)	(1,696)	3,299)	(3,116)	(1,878)
Solvency Ratio
Debt to equity¹	42.25	27.65	—	11.29	—	—
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt	52,243)	50,364)	46,269)	43,422)	37,377)	33,952)
Stockholders’ equity (deficit)	1,044)	1,562)	(1,696)	3,299)	(3,116)	(1,878)
Solvency Ratio
Adjusted debt to equity²	50.04	32.24	—	13.16	—	—

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

2024 Calculations

¹ Debt to equity = Total debt ÷ Stockholders’ equity (deficit)
= 44,111 ÷ 1,044 = 42.25

² Adjusted debt to equity = Adjusted total debt ÷ Stockholders’ equity (deficit)
= 52,243 ÷ 1,044 = 50.04

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	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020	Feb 3, 2019
As Reported
Selected Financial Data (US$ in millions)
Net earnings	15,143)	17,105)	16,433)	12,866)	11,242)	11,121)
Total assets	76,530)	76,445)	71,876)	70,581)	51,236)	44,003)
Profitability Ratio
ROA¹	19.79%	22.38%	22.86%	18.23%	21.94%	25.27%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net earnings	15,143)	17,105)	16,433)	12,866)	11,242)	11,121)
Adjusted total assets	76,530)	76,445)	71,876)	70,581)	51,236)	48,753)
Profitability Ratio
Adjusted ROA²	19.79%	22.38%	22.86%	18.23%	21.94%	22.81%

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

2024 Calculations

¹ ROA = 100 × Net earnings ÷ Total assets
= 100 × 15,143 ÷ 76,530 = 19.79%

² Adjusted ROA = 100 × Net earnings ÷ Adjusted total assets
= 100 × 15,143 ÷ 76,530 = 19.79%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Home Depot Inc. adjusted ROA deteriorated from 2022 to 2023 and from 2023 to 2024.

Home Depot Inc. (NYSE:HD)

Analysis of Operating Leases

Adjustments to Financial Statements for Operating Leases

Home Depot Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

Home Depot Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)