Stock Analysis on Net

Home Depot Inc. (NYSE:HD)

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Analysis of Income Taxes

Microsoft Excel

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Income Tax Expense (Benefit)

Home Depot Inc., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Federal
State
Foreign
Current
Federal
State
Foreign
Deferred
Provision for income taxes

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).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Home Depot Inc. current decreased from 2022 to 2023 and from 2023 to 2024.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Home Depot Inc. deferred increased from 2022 to 2023 but then slightly decreased from 2023 to 2024 not reaching 2022 level.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Home Depot Inc. provision for income taxes increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.

Effective Income Tax Rate (EITR)

Home Depot Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel
Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Federal statutory tax rate
Combined federal, state, and foreign effective tax rate

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).

Item Description The company
Combined federal, state, and foreign effective tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Home Depot Inc. combined federal, state, and foreign effective tax rate decreased from 2022 to 2023 but then slightly increased from 2023 to 2024.

Components of Deferred Tax Assets and Liabilities

Home Depot Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Deferred compensation
Accrued self-insurance liabilities
State income taxes
Merchandise inventories
Non-deductible reserves
Net operating losses
Lease liabilities
Deferred revenue
Other
Deferred tax assets
Valuation allowance
Deferred tax assets, net of valuation allowance
Merchandise inventories
Property and equipment
Goodwill and other intangibles
Lease right-of-use assets
Tax on unremitted earnings
Other
Deferred tax liabilities
Net deferred tax assets (liabilities)

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).

Item Description The company
Deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Home Depot Inc. deferred tax assets increased from 2022 to 2023 and from 2023 to 2024.
Deferred tax assets, net of valuation allowance Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Home Depot Inc. deferred tax assets, net of valuation allowance increased from 2022 to 2023 and from 2023 to 2024.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Home Depot Inc. net deferred tax assets (liabilities) decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

Deferred Tax Assets and Liabilities, Classification

Home Depot Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Deferred tax assets (included in Other assets)
Deferred tax liabilities

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).

Item Description The company
Deferred tax assets (included in Other assets) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Home Depot Inc. deferred tax assets (included in Other assets) decreased from 2022 to 2023 and from 2023 to 2024.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Home Depot Inc. deferred tax liabilities increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.

Adjustments to Financial Statements: Removal of Deferred Taxes

Home Depot Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
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)
Less: Noncurrent deferred tax assets, net
Total assets (adjusted)
Adjustment to Total Liabilities
Total liabilities (as reported)
Less: Noncurrent deferred tax liabilities, net
Total liabilities (adjusted)
Adjustment to Stockholders’ Equity (deficit)
Stockholders’ equity (deficit) (as reported)
Less: Net deferred tax assets (liabilities)
Stockholders’ equity (deficit) (adjusted)
Adjustment to Net Earnings
Net earnings (as reported)
Add: Deferred income tax expense (benefit)
Net earnings (adjusted)

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).


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


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Home Depot Inc., adjusted financial ratios

Microsoft Excel
Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Net Profit Margin
Reported net profit margin
Adjusted net profit margin
Total Asset Turnover
Reported total asset turnover
Adjusted total asset turnover
Financial Leverage
Reported financial leverage
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

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).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Home Depot Inc. adjusted net profit margin ratio improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.
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 adjusted net income divided by adjusted total assets. Home Depot Inc. adjusted ROA improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.

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


Adjusted Net Profit Margin

Microsoft Excel
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
Net sales
Profitability Ratio
Net profit margin1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings
Net sales
Profitability Ratio
Adjusted net profit margin2

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 Net profit margin = 100 × Net earnings ÷ Net sales
= 100 × ÷ =

2 Adjusted net profit margin = 100 × Adjusted net earnings ÷ Net sales
= 100 × ÷ =

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Home Depot Inc. adjusted net profit margin ratio improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.

Adjusted Total Asset Turnover

Microsoft Excel
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
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net sales
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

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
= ÷ =

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= ÷ =

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.

Adjusted Financial Leverage

Microsoft Excel
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 assets
Stockholders’ equity (deficit)
Solvency Ratio
Financial leverage1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets
Adjusted stockholders’ equity (deficit)
Solvency Ratio
Adjusted financial leverage2

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 Financial leverage = Total assets ÷ Stockholders’ equity (deficit)
= ÷ =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity (deficit)
= ÷ =


Adjusted Return on Equity (ROE)

Microsoft Excel
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
Stockholders’ equity (deficit)
Profitability Ratio
ROE1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings
Adjusted stockholders’ equity (deficit)
Profitability Ratio
Adjusted ROE2

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 ROE = 100 × Net earnings ÷ Stockholders’ equity (deficit)
= 100 × ÷ =

2 Adjusted ROE = 100 × Adjusted net earnings ÷ Adjusted stockholders’ equity (deficit)
= 100 × ÷ =


Adjusted Return on Assets (ROA)

Microsoft Excel
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
Total assets
Profitability Ratio
ROA1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings
Adjusted total assets
Profitability Ratio
Adjusted ROA2

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 × ÷ =

2 Adjusted ROA = 100 × Adjusted net earnings ÷ Adjusted total assets
= 100 × ÷ =

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