Home Depot Inc. (NYSE:HD)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes showed an overall increasing trend from 12,860 million USD in February 2020 to a peak of 18,170 million USD in January 2023. However, after this peak, there was a decline to 16,384 million USD in January 2024, followed by a slight recovery to 16,730 million USD in February 2025. This pattern indicates an initial growth period followed by a moderate contraction and stabilization in recent periods.

Cost of Capital

The cost of capital has fluctuated slightly but remained relatively stable, ranging between 12.94% and 13.65%. The highest value was observed in January 2024 at 13.65%, while the lowest was in February 2020 at 12.94%. This stability suggests a consistent risk and financing environment over the analyzed periods.

Invested Capital

Invested capital exhibited a general upward trend, increasing significantly from 36,678 million USD in February 2020 to 72,841 million USD in February 2025. There was an exception in the period ending January 2022 when invested capital decreased slightly from 49,973 million USD to 48,299 million USD. The substantial increase towards the later years indicates considerable investment or asset acquisition activities.

Economic Profit

Economic profit followed a fluctuating pattern, starting at 8,112 million USD in February 2020 and peaking at 11,656 million USD in January 2022. After this peak, it declined steadily to 6,991 million USD by February 2025. This decline in economic profit despite growing invested capital suggests decreasing returns above the cost of capital in the most recent periods.

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.

Economic Profit

Economic profit exhibited fluctuations over the observed periods. It started at 8,112 million US dollars in early 2020, then decreased to 7,478 million in early 2021. A significant increase followed, peaking at 11,656 million in early 2022. Afterwards, economic profit declined consecutively to 10,831 million in 2023, 8,756 million in 2024, and further down to 6,991 million in 2025. This indicates a notable upward trend followed by a steady decline in profitability.

Invested Capital

Invested capital showed a generally rising trajectory throughout the periods. Starting from 36,678 million US dollars in early 2020, there was a substantial increase to 49,973 million in early 2021. It then slightly decreased to 48,299 million in early 2022 before resuming growth to 55,111 million in 2023 and 55,884 million in 2024. By early 2025, invested capital surged significantly to 72,841 million. This indicates continual reinvestment and asset growth over the span of six years.

Economic Spread Ratio

The economic spread ratio, which measures the return on invested capital relative to cost, demonstrated a declining trend after an initial fluctuation. It started high at 22.12% in early 2020, dropping to 14.96% in early 2021. A recovery occurred in early 2022, reaching its peak at 24.13%, followed by declines in the subsequent years to 19.65% in 2023, 15.67% in 2024, and a considerable reduction to 9.6% in early 2025. The pattern suggests deteriorating returns on investments over the latter part of the period.

Summary

Overall, the data reveal that while invested capital increased substantially over the analyzed years, economic profit and the economic spread ratio both experienced volatility with peaks around early 2022 followed by consistent declines. The decreasing economic spread ratio despite growing invested capital suggests eroding efficiency in generating returns. The declining economic profit after 2022 highlights challenges in maintaining profitability amid increased investment levels.

Economic Profit

Economic profit shows a fluctuating pattern over the periods presented. It initially decreases from 8112 million US dollars in February 2020 to 7478 million in January 2021. Subsequently, there is a noticeable increase reaching a peak of 11656 million in January 2022. After this peak, economic profit declines moderately in the following years, reaching 6991 million by February 2025, representing the lowest point in the timeframe.

Adjusted Net Sales

Adjusted net sales demonstrate a general upward trend across the periods, indicating growth in revenue. Starting at 110559 million US dollars in February 2020, sales increase consistently to reach 159362 million by February 2025. There is a slight dip observed in January 2024 compared to January 2023, but the overall trajectory is positive, highlighting expanding sales operations.

Economic Profit Margin

The economic profit margin exhibits some variability, with an overall declining trend in recent periods. It starts at 7.34% in February 2020, dips to 5.63% in January 2021, then rises again to 7.67% in January 2022. Following this peak, the margin decreases consistently through to 4.39% by February 2025. This trend suggests a reduction in economic profitability relative to sales over the latter part of the period, possibly indicating increased costs or reduced efficiency.