Home Depot Inc. (HD) | Profitability Analysis
Profitability ratios measure the company's ability to generate profitable sales from its resources (assets).
Ratios (Summary)
Home Depot Inc., profitability ratios
| Feb 3, 2013 | Jan 29, 2012 | Jan 30, 2011 | Jan 31, 2010 | Feb 1, 2009 | Feb 3, 2008 | ||
|---|---|---|---|---|---|---|---|
| Return on Sales | |||||||
| Gross profit margin | 34.57% | 34.47% | 34.27% | 33.87% | 33.65% | 33.61% | |
| Operating profit margin | 10.39% | 9.46% | 8.59% | 7.26% | 6.11% | 9.36% | |
| Net profit margin | 6.07% | 5.52% | 4.91% | 4.02% | 3.17% | 5.68% | |
| Return on Investment | |||||||
| Return on equity (ROE) | 25.51% | 21.70% | 17.67% | 13.72% | 12.71% | 24.81% | |
| Return on assets (ROA) | 11.04% | 9.58% | 8.32% | 6.51% | 5.49% | 9.92% | |
Source: Based on data from Home Depot Inc. Annual Reports
| Ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Home Depot Inc.'s gross profit margin improved from 2011 to 2012 and from 2012 to 2013. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Home Depot Inc.'s operating profit margin improved from 2011 to 2012 and from 2012 to 2013. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Home Depot Inc.'s net profit margin improved from 2011 to 2012 and from 2012 to 2013. |
| ROE | A profitability ratio calculated as net income divided by shareholders' equity. | Home Depot Inc.'s ROE improved from 2011 to 2012 and from 2012 to 2013. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Home Depot Inc.'s ROA improved from 2011 to 2012 and from 2012 to 2013. |
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Gross Profit Margin
| Feb 3, 2013 | Jan 29, 2012 | Jan 30, 2011 | Jan 31, 2010 | Feb 1, 2009 | Feb 3, 2008 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| Gross profit | 25,842 | 24,262 | 23,304 | 22,412 | 23,990 | 25,997 | |
| Net sales | 74,754 | 70,395 | 67,997 | 66,176 | 71,288 | 77,349 | |
| Gross profit margin1 | 34.57% | 34.47% | 34.27% | 33.87% | 33.65% | 33.61% | |
Source: Based on data from Home Depot Inc. Annual Reports
2013 Calculations
1 Gross profit margin = 100 × Gross profit ÷ Net sales
= 100 × 25,842 ÷ 74,754 = 34.57%
| Ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Home Depot Inc.'s gross profit margin improved from 2011 to 2012 and from 2012 to 2013. |
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Operating Profit Margin
| Feb 3, 2013 | Jan 29, 2012 | Jan 30, 2011 | Jan 31, 2010 | Feb 1, 2009 | Feb 3, 2008 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| Operating income | 7,766 | 6,661 | 5,839 | 4,803 | 4,359 | 7,242 | |
| Net sales | 74,754 | 70,395 | 67,997 | 66,176 | 71,288 | 77,349 | |
| Operating Profit Margin, Comparison to Industry | |||||||
| Home Depot Inc.1 | 10.39% | 9.46% | 8.59% | 7.26% | 6.11% | 9.36% | |
| Industry, Consumer Services | –% | 8.30% | 8.38% | 7.93% | 7.50% | 5.80% | |
Source: Based on data from Home Depot Inc. Annual Reports
2013 Calculations
1 Operating profit margin = 100 × Operating income ÷ Net sales
= 100 × 7,766 ÷ 74,754 = 10.39%
| Ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Home Depot Inc.'s operating profit margin improved from 2011 to 2012 and from 2012 to 2013. |
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Net Profit Margin
| Feb 3, 2013 | Jan 29, 2012 | Jan 30, 2011 | Jan 31, 2010 | Feb 1, 2009 | Feb 3, 2008 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| Net earnings | 4,535 | 3,883 | 3,338 | 2,661 | 2,260 | 4,395 | |
| Net sales | 74,754 | 70,395 | 67,997 | 66,176 | 71,288 | 77,349 | |
| Net Profit Margin, Comparison to Industry | |||||||
| Home Depot Inc.1 | 6.07% | 5.52% | 4.91% | 4.02% | 3.17% | 5.68% | |
| Industry, Consumer Services | –% | 4.90% | 5.08% | 4.65% | 4.41% | 2.95% | |
Source: Based on data from Home Depot Inc. Annual Reports
2013 Calculations
1 Net profit margin = 100 × Net earnings ÷ Net sales
= 100 × 4,535 ÷ 74,754 = 6.07%
| Ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Home Depot Inc.'s net profit margin improved from 2011 to 2012 and from 2012 to 2013. |
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Return on Equity (ROE)
| Feb 3, 2013 | Jan 29, 2012 | Jan 30, 2011 | Jan 31, 2010 | Feb 1, 2009 | Feb 3, 2008 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| Net earnings | 4,535 | 3,883 | 3,338 | 2,661 | 2,260 | 4,395 | |
| Stockholders’ equity | 17,777 | 17,898 | 18,889 | 19,393 | 17,777 | 17,714 | |
| ROE, Comparison to Industry | |||||||
| Home Depot Inc.1 | 25.51% | 21.70% | 17.67% | 13.72% | 12.71% | 24.81% | |
| Industry, Consumer Services | –% | 17.43% | 17.61% | 14.97% | 15.04% | 9.81% | |
Source: Based on data from Home Depot Inc. Annual Reports
2013 Calculations
1 ROE = 100 × Net earnings ÷ Stockholders’ equity
= 100 × 4,535 ÷ 17,777 = 25.51%
| Ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders' equity. | Home Depot Inc.'s ROE improved from 2011 to 2012 and from 2012 to 2013. |
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Return on Assets (ROA)
| Feb 3, 2013 | Jan 29, 2012 | Jan 30, 2011 | Jan 31, 2010 | Feb 1, 2009 | Feb 3, 2008 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| Net earnings | 4,535 | 3,883 | 3,338 | 2,661 | 2,260 | 4,395 | |
| Total assets | 41,084 | 40,518 | 40,125 | 40,877 | 41,164 | 44,324 | |
| ROA, Comparison to Industry | |||||||
| Home Depot Inc.1 | 11.04% | 9.58% | 8.32% | 6.51% | 5.49% | 9.92% | |
| Industry, Consumer Services | –% | 7.67% | 7.93% | 7.12% | 6.96% | 4.23% | |
Source: Based on data from Home Depot Inc. Annual Reports
2013 Calculations
1 ROA = 100 × Net earnings ÷ Total assets
= 100 × 4,535 ÷ 41,084 = 11.04%
| Ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | Home Depot Inc.'s ROA improved from 2011 to 2012 and from 2012 to 2013. |
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