Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.
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- Income Statement
- Common-Size Income Statement
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Geographic Areas
- Net Profit Margin since 2005
- Current Ratio since 2005
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Debt
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Balance-Sheet-Based Accruals Ratio
Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
---|---|---|---|---|---|---|---|
Operating Assets | |||||||
Total assets | |||||||
Less: Cash and cash equivalents | |||||||
Operating assets | |||||||
Operating Liabilities | |||||||
Total liabilities | |||||||
Less: Short-term debt | |||||||
Less: Current installments of long-term debt | |||||||
Less: Long-term debt, excluding current installments | |||||||
Operating liabilities | |||||||
Net operating assets1 | |||||||
Balance-sheet-based aggregate accruals2 | |||||||
Financial Ratio | |||||||
Balance-sheet-based accruals ratio3 | |||||||
Benchmarks | |||||||
Balance-Sheet-Based Accruals Ratio, Competitors4 | |||||||
Amazon.com Inc. | |||||||
Lowe’s Cos. Inc. | |||||||
TJX Cos. Inc. | |||||||
Balance-Sheet-Based Accruals Ratio, Sector | |||||||
Consumer Discretionary Distribution & Retail | |||||||
Balance-Sheet-Based Accruals Ratio, Industry | |||||||
Consumer Discretionary |
Based on: 10-K (reporting date: 2025-02-02), 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).
1 2025 Calculation
Net operating assets = Operating assets – Operating liabilities
= – =
2 2025 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2025 – Net operating assets2024
= – =
3 2025 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × ÷ [( + ) ÷ 2] =
4 Click competitor name to see calculations.
The data reflects several notable trends in the financial reporting quality measures over the five-year period under review.
- Net operating assets
- This metric shows a consistent upward trajectory from 32,642 million USD in early 2021 to 58,364 million USD by early 2025. The increase is steady from 2021 through 2023, with a slight dip observed in early 2024, followed by a significant jump in 2025. Such growth indicates an expansion in the company's operating asset base over the duration analyzed.
- Balance-sheet-based aggregate accruals
- This line item exhibits considerable volatility. Initial values show a decline from 6,408 million USD in 2021 to 3,405 million USD in 2022, followed by a rebound to 5,951 million USD in 2023. A notable negative value of -603 million USD is recorded in 2024, indicating that accruals decreased below zero, which may suggest adjustments or reversals during that period. In 2025, there is a sharp increase to 16,969 million USD, which is the highest recorded value, denoting a substantial change in accruals behavior.
- Balance-sheet-based accruals ratio
- There is a corresponding fluctuation reflected in the accruals ratio, which declines sharply from 21.77% in 2021 to 9.91% in 2022, rises again to 15.25% in 2023, then turns negative to -1.45% in 2024, before soaring significantly to 34.02% in 2025. The negative ratio in 2024 signals a period where accruals effectively reduced net operating assets. The substantial increase in 2025 suggests heightened accruals relative to net operating assets, which could imply a change in earnings quality or accounting practices in that year.
Overall, the data points to an expanding operational asset base accompanied by significant fluctuations in accrual activity, particularly noticeable in 2024 and 2025. The negative accrual ratio in 2024 and subsequent spike in 2025 warrant further investigation to understand underlying operational or accounting factors affecting financial reporting quality.
Cash-Flow-Statement-Based Accruals Ratio
Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
---|---|---|---|---|---|---|---|
Net earnings | |||||||
Less: Net cash provided by operating activities | |||||||
Less: Net cash used in investing activities | |||||||
Cash-flow-statement-based aggregate accruals | |||||||
Financial Ratio | |||||||
Cash-flow-statement-based accruals ratio1 | |||||||
Benchmarks | |||||||
Cash-Flow-Statement-Based Accruals Ratio, Competitors2 | |||||||
Amazon.com Inc. | |||||||
Lowe’s Cos. Inc. | |||||||
TJX Cos. Inc. | |||||||
Cash-Flow-Statement-Based Accruals Ratio, Sector | |||||||
Consumer Discretionary Distribution & Retail | |||||||
Cash-Flow-Statement-Based Accruals Ratio, Industry | |||||||
Consumer Discretionary |
Based on: 10-K (reporting date: 2025-02-02), 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).
1 2025 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × ÷ [( + ) ÷ 2] =
2 Click competitor name to see calculations.
The analysis of the annual financial reporting quality measures reveals several significant trends over the five-year period.
- Net Operating Assets
- The net operating assets increased consistently from US$32,642 million in 2021 to US$58,364 million in 2025. This represents an overall upward trajectory with a particularly notable rise in the final year, indicating substantial growth in assets involved in the company's core operations.
- Cash-flow-statement-based Aggregate Accruals
- The aggregate accruals showed notable volatility throughout the period. Beginning at US$4,197 million in 2021, the figure decreased to US$2,831 million in 2022, then sharply increased to US$5,630 million in 2023. A significant decline followed in 2024 when the value turned negative at -US$1,300 million. In 2025, a dramatic surge to US$16,027 million occurred. This fluctuation suggests variability in the timing differences between accounting earnings and cash flows, which could reflect changes in earnings quality or operational adjustments.
- Cash-flow-statement-based Accruals Ratio
- The accruals ratio, expressed as a percentage of net operating assets, mirrored the fluctuations seen in aggregate accruals. It started at 14.26% in 2021, then declined to 8.24% in 2022, before increasing again to 14.43% in 2023. A negative ratio of -3.12% in 2024 indicates a reversal, aligning with the negative aggregate accruals of that year. In 2025, the ratio escalated to 32.13%, the highest in the period, pointing to a larger proportion of accruals relative to net operating assets.
Overall, the data depicts a growing asset base with considerable fluctuations in accrual levels and ratios over five years. The negative accrual value and ratio in 2024 is a distinctive occurrence amid otherwise positive figures, which may warrant further investigation. The sharp rise in both aggregate accruals and the accruals ratio in 2025 suggests an increase in earnings management risk or changes in operational cash flow timing that could impact financial reporting quality in that year.