Home Depot Inc. (NYSE:HD)

Net Operating Profit After Taxes (NOPAT)

The NOPAT displayed an overall increasing trend from 2020 through 2022, rising from 12,860 million USD to 18,148 million USD. However, figures stagnated in 2023 around 18,170 million USD and subsequently declined in the following years, dropping to 16,384 million USD in 2024 and slightly recovering to 16,730 million USD in 2025.

Cost of Capital

The cost of capital slightly fluctuated over the period, starting at 12.93% in 2020, peaking at 13.64% in 2024, and then declining marginally to 13.36% in 2025. These variations are relatively minor but indicate a generally stable cost of capital environment with a slight upward trend mid-period.

Invested Capital

Invested capital showed considerable growth over the analyzed years. Beginning at 36,678 million USD in 2020, it increased substantially to 49,973 million USD in 2021, experienced a slight dip in 2022 to 48,299 million USD, then rose steadily to 55,884 million USD in 2024 and surged significantly to 72,841 million USD in 2025. This pattern suggests a notable expansion in the asset base and invested resources, particularly in the latter years.

Economic Profit

Economic profit exhibited a peak in 2022 at 11,663 million USD, following an initial decline from 8,117 million USD in 2020 to 7,484 million USD in 2021. Subsequently, economic profit decreased steadily after 2022, dropping to 7,001 million USD by 2025. This declining trend post-peak indicates diminishing returns relative to the cost of capital despite the increased invested capital.

Overall Analysis

The data reveals that the company initially improved profitability and economic profit while managing a fairly stable cost of capital. Nevertheless, despite increasing invested capital, economic profit has declined since its 2022 peak, signaling potential challenges in achieving returns commensurate with the capital invested. The slight decrease in NOPAT in recent years could be contributing to this reduced economic profit. Continued growth in invested capital, without proportional profit growth, may pressure value creation in the future if current trends persist.

Net Earnings

Net earnings exhibit an overall upward trend from the initial value of 11,242 million US dollars in the period ending February 2, 2020, reaching a peak of 17,105 million US dollars by January 29, 2023. However, after this peak, there is a noticeable decline, with net earnings decreasing to 15,143 million US dollars in January 28, 2024, and further slightly declining to 14,806 million US dollars by February 2, 2025.

Net Operating Profit After Taxes (NOPAT)

NOPAT shows an increasing pattern from 12,860 million US dollars in the period ending February 2, 2020, to reach 18,170 million US dollars as of January 29, 2023. Following this peak, there is a decline in the subsequent period to 16,384 million US dollars in January 28, 2024. However, unlike net earnings, NOPAT recovers slightly in the most recent period, increasing to 16,730 million US dollars by February 2, 2025.

Comparative Insights

Both net earnings and NOPAT follow a similar trend characterized by growth up to the period ending early 2023, followed by a reduction. The decline in net earnings is more consistent in the last two periods, whereas NOPAT experiences a partial recovery in the final period. This divergence could indicate changes in operational efficiency or tax impacts that warrant further examination. Overall, the data suggests a phase of growth culminating around 2023, with some signs of financial pressure or transitional changes in profitability thereafter.

The financial data reveals the trends in provision for income taxes and cash operating taxes over six consecutive years.

Provision for Income Taxes

From February 2020 to January 2021, the provision for income taxes increased significantly from 3,473 million US dollars to 4,112 million, representing a notable rise. This upward trend continued into January 2022, peaking at 5,304 million US dollars. However, in the following years, the provision began to decline slightly: decreasing to 5,372 million in January 2023, then further reducing to 4,781 million in January 2024, and ending at 4,600 million in February 2025. Overall, after an initial sharp rise through 2022, the provision for income taxes demonstrated a downward adjustment over the last three years in the dataset.

Cash Operating Taxes

Cash operating taxes showed a strong upward movement from 3,573 million US dollars in February 2020 to 5,040 million in January 2021. This increase continued into January 2022 with another rise to 5,876 million. The following year, January 2023, registered a slight decrease to 5,622 million, which continued with marginal declines in subsequent years: 5,482 million in January 2024 and 5,201 million in February 2025. This pattern indicates that after reaching a peak in early 2022, cash operating taxes began to taper moderately but remained considerably higher than the initial 2020 values.

In summary, both provision for income taxes and cash operating taxes experienced significant growth from 2020 through early 2022, indicating increased tax-related expenses or obligations during this period. Post-2022, both metrics showed a gradual decline, potentially reflecting changes in taxable income, tax strategies, or regulatory impacts. The consistent higher levels from 2021 onwards compared to 2020 suggest an overall increase in tax burden or profitability subject to tax over the six-year span.

The financial data reveals several notable trends in the company’s capital structure and financial position over the observed periods.

Total reported debt & leases

This figure exhibits a consistent upward trend throughout the periods, increasing from $37,377 million in early 2020 to $62,290 million by early 2025. The rise indicates a growing reliance on debt and lease obligations, which increased by nearly 67% over the five-year span.

Stockholders’ equity (deficit)

Stockholders’ equity fluctuates significantly, starting with a negative position of -$3,116 million in early 2020 and improving to a positive $3,299 million by early 2021. However, it swings back to a negative figure in early 2022 at -$1,696 million, before gradually increasing again to reach $6,640 million by early 2025. This volatility suggests periods of financial strain or restructuring, followed by recovery phases, ultimately resulting in a strengthened equity base.

Invested capital

Invested capital shows an overall increasing pattern, beginning at $36,678 million in 2020, rising to $49,973 million in 2021, and experiencing some fluctuations before reaching a peak of $72,841 million in 2025. This growth reflects increased capital deployment, possibly through investments, acquisitions, or asset expansion aligning with the rise in debt levels.

In summary, the company appears to have expanded its capital base and debt load significantly over the period, while stockholders’ equity demonstrated volatility but ultimately improved. The overall increase in invested capital alongside growing debt indicates a strategy of leveraging to finance growth or operations, which has enhanced the total resources employed in the business.

The data reveals several important trends over the analyzed periods. Economic profit, measured in millions of US dollars, shows fluctuations with a general downward trend in recent years. Specifically, economic profit peaked in January 30, 2022, at 11,663 million USD, followed by a decline through to February 2, 2025, where it reached 7,001 million USD.

Invested capital, also measured in millions of US dollars, displays a consistent upward trajectory throughout the periods. The invested capital increased steadily from 36,678 million USD in February 2, 2020, to a high of 72,841 million USD in February 2, 2025, indicating growing resource commitment over time.

The economic spread ratio, expressed as a percentage, fluctuates with considerable variation. It reached its highest value at 24.15% on January 30, 2022, followed by a marked decline to 9.61% on February 2, 2025. This downward trend in economic spread ratio signals a reduction in the efficiency or profitability of the invested capital relative to the cost involved.

Economic Profit

Experienced peak performance in early 2022 but subsequently showed a declining trend.

Invested Capital

Consistently increased, showing a growing scale of investment over the years.

Economic Spread Ratio

Displayed a peak in early 2022 before declining substantially by early 2025, indicating diminishing economic margins.

Overall, the combination of rising invested capital with declining economic profit and economic spread ratio in recent periods suggests that while the company has increased its capital base, the returns generated relative to that capital have decreased, pointing to potential challenges in maintaining profitability levels or increasing capital costs.

The financial data reveals several noteworthy trends over the six-year period under review. Economic profit, measured in millions of US dollars, exhibits fluctuations with a peak observed in the fiscal year ending January 30, 2022. Following this peak, there is a general downward trend in economic profit, declining steadily through to February 2, 2025.

Adjusted net sales consistently increase over the same timeframe, indicating growth in revenue generation. This upward trend is steady with only minor deceleration observed between January 28, 2024, and February 2, 2025. The continuous increase in net sales suggests successful expansion or increased market demand.

The economic profit margin, expressed as a percentage, shows a pattern of variability. It starts moderately high, declines in the second year, then improves significantly in the third year, reaching its highest point. However, from that peak onward, it decreases steadily, ending at the lowest margin in the latest period. This declining margin indicates that although sales have increased, the profitability relative to sales has diminished over recent years.

Economic profit

Initial growth culminating in a peak in early 2022, followed by a consistent decline through 2025.

Adjusted net sales

Continuous growth across the periods, reflecting robust sales expansion despite fluctuations in profit.

Economic profit margin

Fluctuating trend with an initial decrease, followed by improvement, and a subsequent progressive decline, suggesting reduced efficiency or increased costs relative to sales.