Home Depot Inc. (NYSE:HD)

The composition of liabilities and stockholders’ equity has undergone significant shifts over the analyzed period, spanning from January 2021 to February 2026. Overall, a notable decrease in the proportion of total liabilities relative to total liabilities and stockholders’ equity is observed, coupled with a corresponding increase in the proportion of stockholders’ equity, particularly towards the later years of the period.

Current Liabilities

Current liabilities as a percentage of the total initially stood at 32.82% in January 2021, peaking at 39.92% in January 2022 before declining to 30.85% by February 2026. Within current liabilities, accounts payable exhibited a decreasing trend from 16.44% to 10.93%, while accrued salaries and related expenses showed a more moderate decline from 3.49% to 2.41%. Sales taxes payable decreased substantially, from 1.10% to 0.48%. Deferred revenue also decreased, from 4.00% to 2.45%. Current installments of long-term debt demonstrated volatility, increasing to 3.40% in 2022 before settling at 4.73% in February 2026. Current operating lease liabilities remained relatively stable, fluctuating between 1.15% and 1.37%.

Long-Term Liabilities

Long-term liabilities initially comprised 62.50% of the total in January 2021, reaching a high of 69.87% in January 2024, and then decreasing to 56.96% by February 2026. Long-term debt, excluding current installments, remained consistently high, fluctuating between 50.75% and 55.85% before decreasing to 44.09%. Long-term operating lease liabilities showed a similar pattern, peaking at 9.25% in January 2024 and declining to 7.76% in February 2026. Deferred income taxes increased from 1.60% to 2.71% over the period.

Stockholders’ Equity

Stockholders’ equity experienced the most dramatic changes. Initially, it represented only 4.67% of the total in January 2021, even showing a deficit of -2.36% in January 2022. However, it increased substantially to 12.19% by February 2026. This increase was primarily driven by a significant rise in retained earnings, which grew from 82.36% to 89.95%. Treasury stock consistently represented a substantial reduction in equity, fluctuating between -93.22% and -124.62% before decreasing to -91.32%. Common stock and paid-in capital remained relatively stable, while accumulated other comprehensive loss increased in magnitude from -0.95% to -1.17% before decreasing to -0.62%.

The overall trend indicates a shift away from reliance on debt financing towards a stronger equity position. The reduction in total liabilities, coupled with the growth in retained earnings, suggests improved profitability and financial stability. The volatility in certain current liability accounts warrants further investigation, but the general pattern suggests effective working capital management. The significant changes in treasury stock also merit attention, potentially indicating share repurchase activity.