Home Depot Inc. (NYSE:HD)

Goodwill

The goodwill value experienced a significant increase throughout the observed period, rising from $2,254 million in 2020 to $19,475 million in 2025. Notable growth occurred between 2023 and 2025, indicating major acquisitions or revaluations during these years.

Customer relationships

Recorded from 2021 onwards, customer relationships steadily increased from $2,965 million to $8,845 million by 2025. This consistent upward trend reflects enhanced valuation of customer-related intangible assets over time.

Trade names (definite-lived)

The trade names category began reporting in 2021 at $151 million and showed a gradual increase to $610 million by 2025, indicating ongoing recognition or acquisition of brand-related assets.

Other intangible assets (definite-lived)

Other definite-lived intangible assets remained nearly constant from 2021 to 2025, fluctuating slightly around a low value, which suggests minimal activity or amortization impact in this category.

Definite-lived intangible assets, gross carrying amount

This amount grew moderately from $3,132 million in 2021 to $9,466 million in 2025, indicating additions or revaluations to definite-lived intangibles, especially accelerating after 2023.

Accumulated amortization

Accumulated amortization increased in magnitude (more negative) from -$169 million in 2021 to -$1,132 million in 2025, reflecting ongoing amortization expenses for intangible assets over time, consistent with the growth in gross carrying amounts.

Definite-lived intangible assets, net carrying amount

The net carrying amount showed a slight decline from $2,963 million in 2021 to $2,674 million in 2023, followed by an increase to $8,334 million in 2025. This uptick in the later years suggests new additions or acquisitions exceeding amortization impacts.

Trade names (indefinite-lived)

The indefinite-lived trade names category remained stable at $649 million from 2021 through 2025, indicating no significant changes in valuation or recognition of these assets.

Indefinite-lived intangible assets

Similarly stable at $649 million from 2021 to 2025, this consistency suggests that indefinite-lived intangible assets have not undergone revaluation or impairment during the period.

Intangible assets (total)

Total intangible assets decreased slightly from $3,612 million in 2021 to $3,323 million in 2023, then rose sharply to $8,983 million by 2025. This pattern aligns with the trends observed in definite-lived intangible assets and indicates significant investments or acquisitions in intangible assets in recent years.

Goodwill and other intangible assets (aggregate)

The combined total of goodwill and other intangible assets increased substantially, from $2,254 million in 2020 to $28,458 million in 2025. The most substantial growth occurred after 2023, underscoring major strategic expansions or acquisitions contributing to asset growth.

The analysis of the financial data over the reported periods reveals several notable trends in the asset base and stockholders' equity of the company.

Total Assets

Reported total assets exhibit a consistent and significant growth trajectory, increasing from US$51,236 million in 2020 to US$96,119 million in 2025. This indicates an approximate doubling over the five-year span, reflecting expansion or acquisition activity contributing to asset accumulation.

Adjusted total assets, which likely exclude goodwill or intangible assets for a more conservative valuation, follow a similar upward pattern, growing from US$48,982 million in 2020 to US$76,644 million in 2025. However, the growth rate is somewhat lower compared to reported assets, suggesting that goodwill represents a growing share of total reported assets over time.

Stockholders’ Equity (Deficit)

Reported stockholders’ equity fluctuates considerably, starting from a deficit of US$-3,116 million in 2020, moving into positive territory by 2021 at US$3,299 million, before reverting to negative again in 2022 at US$-1,696 million. This volatility continues with a modest positive balance in 2023 and 2024 (US$1,562 million and US$1,044 million respectively), culminating in a significant increase to US$6,640 million in 2025. Such fluctuations may suggest periods of losses, recapitalizations, or accounting adjustments affecting equity.

In contrast, the adjusted stockholders’ equity consistently reports a deficit throughout the entire period, worsening from US$-5,370 million in 2020 to US$-12,835 million in 2025. The persistent negative values under this adjustment imply that when excluding goodwill, the company’s net asset position is markedly weaker. The deepening deficit could indicate underlying financial challenges or accumulated impairment losses impacting net equity.

Overall, the reported figures suggest growth in asset size and a recovery in shareholder equity by the end of the period, albeit with volatility. The adjusted data, however, reveals a more cautious view with persistently negative equity, underscoring the importance of considering intangible assets such as goodwill in the valuation and financial health analysis.

The data reveals several key financial trends over the reported periods.

Total Asset Turnover

The reported total asset turnover ratio shows a generally declining trend from 2.15 in early 2020 to 1.66 in early 2025, indicating a reduction in the efficiency with which assets generate revenue based on reported figures. In contrast, the adjusted total asset turnover—which presumably excludes goodwill—displays a higher and more stable ratio, fluctuating from 2.25 in 2020 to 2.08 in 2025. Although it also declines slightly, the adjusted figures suggest better asset utilization when excluding non-operating assets.

Financial Leverage

Reported financial leverage presents significant volatility with some missing data points. It spikes dramatically from 21.39 in early 2021 to 48.94 in early 2023 and further to 73.3 by early 2024, before sharply declining to 14.48 in early 2025. This indicates periods of extreme reliance on debt financing or other liabilities, followed by a substantial deleveraging. No data is available for adjusted financial leverage, limiting further analysis on debt adjusted for goodwill.

Return on Equity (ROE)

The reported ROE experiences extreme fluctuations, with incomplete data early on, then escalating massively to 1095.07% in early 2023, peaking at 1450.48% in early 2024, and subsequently decreasing to 222.98% in early 2025. Such extraordinary values often imply either exceptional profitability or possibly distortions from accounting adjustments or financial structure changes. The absence of adjusted ROE values restricts interpretation related to goodwill adjustments.

Return on Assets (ROA)

The reported ROA shows a moderate downward trend from 21.94% in early 2020 to 15.4% in early 2025, suggesting a gradual decline in overall asset profitability. Adjusted ROA figures, which account for goodwill, consistently exceed reported ROA by approximately 1-3 percentage points, ranging from 22.95% in 2020 to 19.32% in 2025. This indicates that excluding goodwill enhances perceived asset efficiency and profitability. Both measures reflect a gradual decrease over time, though the adjusted ROA remains materially higher at each point.

In summary, the company exhibits declining efficiency in asset utilization based on reported metrics but maintains relatively stronger performance when excluding goodwill. Financial leverage has been notably volatile, with periods of extreme gearing followed by marked deleveraging. Reported profitability measures, particularly ROE, show extraordinary variability that may warrant further investigation. Return on assets trends downward, yet the adjustment for goodwill consistently yields better performance metrics, indicating the significance of goodwill in evaluating the true operational efficiency.

The reported total assets demonstrate a consistent upward trend over the observed periods, increasing from $51,236 million in early 2020 to $96,119 million in early 2025. This represents a substantial growth in reported asset base, with the most significant jump occurring between 2024 and 2025. Adjusted total assets, which exclude goodwill or other accounting adjustments, also follow a similar increasing pattern but maintain slightly lower values compared to the reported figures throughout all periods. The adjusted assets grew from $48,982 million in 2020 to $76,644 million in 2025, indicating a solid expansion albeit at a relatively more moderate pace than the reported assets.

Regarding asset turnover, the reported total asset turnover ratio exhibits some variability but shows an overall declining trend from 2.15 in 2020 to 1.66 in 2025. After a dip in 2021, the ratio slightly recovered before gradually decreasing again, suggesting that the company is generating less revenue per unit of reported asset over time. This could imply reduced efficiency in utilizing its asset base to produce sales under the reported accounting figures.

In contrast, the adjusted total asset turnover ratio remains higher than the reported asset turnover throughout the period and shows a generally stable to slightly declining trend. Starting at 2.25 in 2020, it peaked at 2.35 in 2022, then gently decreased to 2.08 by 2025. This indicates the adjusted asset base has been utilized relatively more efficiently to generate sales, although there is a moderate decline in turnover efficiency in the most recent years.

Overall, the data indicates substantial growth in both reported and adjusted assets, reflecting expansion or increased investment. However, the efficiency ratios suggest a gradual reduction in revenue generation per asset unit, particularly under the reported figures, which may point to challenges in maintaining asset productivity or operational leverage as the asset base grows. The adjusted figures provide a somewhat more favorable view of asset productivity, emphasizing the impact of goodwill or similar adjustments on performance metrics.

Total Assets

Reported total assets show a consistent upward trend from 51,236 million USD in early 2020 to 96,119 million USD by early 2025. Adjusted total assets also demonstrate growth, increasing from 48,982 million USD in 2020 to 76,644 million USD in 2025. The adjusted figures remain below the reported totals, indicating that goodwill adjustments reduce the asset base but do not affect the overall positive growth trajectory.

Stockholders’ Equity (Deficit)

The reported stockholders’ equity exhibits volatility over the periods. It starts with a deficit of -3,116 million USD in 2020, improves to a positive 3,299 million USD in 2021, then fluctuates back into deficit by 2022, and modestly positive again in 2023 and 2024 before a substantial increase to 6,640 million USD in 2025. In contrast, the adjusted stockholders’ equity consistently remains in deficit throughout all periods examined, deteriorating further in 2025 to -12,835 million USD, suggesting that goodwill adjustments reveal deeper equity weaknesses not visible in the reported figures.

Financial Leverage

Reported financial leverage ratios show considerable variation. The data is missing for early periods except for a ratio of 21.39 (date unspecified) and then jumps dramatically to 48.94 in early 2023, further rising to 73.3 shortly thereafter, before declining sharply to 14.48 in early 2025. This wide fluctuation indicates significant changes in the company's capital structure and reliance on debt over the period analyzed. Adjusted financial leverage data is not available, preventing direct comparison with the reported leverage.

Insights and Trends

The company’s total assets have expanded considerably over five years, reflecting growth or acquisition activity. However, the persistent adjusted equity deficits combined with the volatile financial leverage suggest underlying financial risk, particularly when goodwill is accounted for. The large swings in reported stockholders’ equity and leverage might indicate episodic financial events such as restructuring or impairment charges. The marked increase in reported equity and the final decline in leverage in 2025 may suggest a stabilization or repositioning of the balance sheet.

The financial data reveals notable volatility in both reported and adjusted stockholders’ equity across the periods examined. Reported stockholders’ equity experienced a significant shift from a negative position of -3,116 million US dollars in early 2020 to a positive 3,299 million by early 2021, indicating a substantial recovery. This positive trend was not sustained, as equity reverted to negative levels at -1,696 million in early 2022, followed by a return to positive territory in the subsequent years, reaching 6,640 million by early 2025, the highest value in the series.

In contrast, adjusted stockholders’ equity, which accounts for goodwill adjustments, consistently remained in negative territory throughout the entire period, reflecting ongoing challenges when excluding goodwill. The adjusted equity showed some improvement from -5,370 million in early 2020 to -3,827 million in early 2021 but deteriorated sharply to -9,145 million in early 2022 and fluctuated thereafter, reaching a low point of -12,835 million by early 2025. This persistent deficit suggests that underlying tangible equity remains under pressure despite the reported figures.

Return on equity (ROE) based on reported figures exhibited extreme variability and unusually high values. While data for some years is missing, the available figures show ROE jumping from 390% (year unspecified) to a peak of 1,450.48% by early 2024 before decreasing to 222.98% in early 2025. Such elevated percentages likely reflect distortions caused by low or negative equity bases in some years, leading to exaggerated returns. No adjusted ROE data is reported, limiting the ability to assess performance excluding goodwill effects.

Overall, the patterns indicate that reported equity and ROE figures are volatile and subject to substantial fluctuations, possibly influenced by goodwill and other accounting adjustments. The persistent negative adjusted equity points to structural challenges in the company’s tangible capital base over these years. The massive swings in reported ROE underscore the potential need for caution when interpreting profitability metrics derived from reported equity in isolation.

Total Assets

The reported total assets show a consistent upward trend over the analyzed periods. Starting from 51,236 million USD in early 2020, the figure increased steadily each year, reaching 96,119 million USD by early 2025. This growth reflects significant asset accumulation. Similarly, the adjusted total assets, which likely exclude goodwill or intangible assets, also increased over the years from 48,982 million USD to 76,644 million USD. However, the rate of growth in adjusted assets is somewhat slower compared to reported assets, suggesting that goodwill or other intangible assets constitute a growing portion of total assets.

Return on Assets (ROA)

The reported ROA exhibits fluctuations but generally shows a decreasing trend over the period. Beginning at 21.94% in 2020, it declined to 15.4% by 2025, with intermediate variations including a peak at 22.86% in 2022. This pattern indicates a decrease in profitability relative to total assets reported. In contrast, the adjusted ROA, which takes into account the adjusted asset base excluding goodwill, is consistently higher than the reported ROA for each year and also shows a similar downward trend, falling from 22.95% in 2020 to 19.32% in 2025. The adjusted ROA, while declining, remains above the reported ROA, highlighting that the inclusion of goodwill in asset base reduces the apparent profitability ratio.

Comparative Insights

The gap between reported and adjusted total assets widens over time, pointing to an increasing impact of goodwill or intangible assets on the balance sheet. Meanwhile, the ROA metrics reveal that profitability, when measured against a more conservative asset base, remains stronger but also declines over the years. This suggests that while asset growth is substantial, it may not be translating into proportionate profitability improvements, potentially due to investments in intangibles or other non-operating assets impacting returns.