Home Depot Inc. (NYSE:HD)

Total Asset Turnover

The reported total asset turnover ratio shows a decline from 2.15 in early 2020 to 1.66 in early 2025, with some fluctuations in between. The adjusted total asset turnover reflects a similar trend, starting at 2.16 and decreasing steadily to 1.66 over the same period. This indicates a gradual decrease in the efficiency with which assets are used to generate sales.

Current Ratio

The reported current ratio exhibits variability, initially rising from 1.08 in 2020 to a peak of 1.41 in early 2023, before declining to 1.11 by early 2025. The adjusted current ratio follows the same pattern but at consistently higher levels, peaking at 1.62 before decreasing to 1.22. Overall, liquidity appears to have improved in the mid-period and then weakened closer to 2025, though it remains above 1.

Debt Ratios

Reported debt to equity ratios show significant volatility, with notable high values in 2023 and 2024 (27.65 and 42.25 respectively) before falling sharply to 8.04 in 2025. Adjusted debt to equity also fluctuates, initially increasing to 18.77 in 2022, declining sharply in 2023, then rising moderately before dropping to the lowest level of 5.69 in 2025. Debt to capital ratios are relatively stable, ranging narrowly around 0.9 to 1.11 with a downward trend toward 0.89 in 2025, indicating marginally reduced reliance on debt financing.

Financial Leverage

Reported financial leverage ratios display extreme variability, peaking at 73.3 in 2024 before falling drastically to 14.48 in 2025. Adjusted financial leverage ratios show a similar but less pronounced pattern, reaching 29.02 in 2022, decreasing and then rising modestly before declining to 8.76 in 2025. These fluctuations suggest periods of substantial leveraging followed by deleveraging.

Profit Margins

The reported net profit margin remains generally stable, highest at 10.87% for two consecutive years before gradually declining to 9.28% in 2025. Adjusted net profit margin follows the same downward trajectory, starting at 10.7% and decreasing to 8.76% by 2025. The trend indicates eroding profitability margins over the analyzed period.

Return on Equity (ROE)

Reported ROE exhibits extraordinary volatility, with extremely high values peaking at 1450.48% in 2024 before falling significantly to 222.98% in 2025. Adjusted ROE similarly shows large swings, reaching 686.37% in 2022, then declining to 127.6% by 2025. These high ratios indicate periods of exceptional returns, possibly influenced by leveraged equity and financial structuring, followed by normalization.

Return on Assets (ROA)

The reported ROA starts at 21.94% in 2020, peaks at 22.86% in 2022, and declines steadily to 15.4% by 2025. Adjusted ROA parallels this trend, starting at 23.15%, peaking at 23.65%, then decreasing to 14.57%. This signals a weakening in asset profitability over time despite earlier strong performance.

Net Sales

Net sales showed a consistent upward trend from 2020 to 2023, increasing from approximately $110.2 billion to $157.4 billion. However, in 2024, there was a slight decline to $152.7 billion, followed by a recovery in 2025 to $159.5 billion, indicating a temporary dip before resuming growth.

Total Assets

Total assets demonstrated a steady increase over the period, rising from $51.2 billion in 2020 to $76.5 billion in 2024. A significant jump occurred in 2025, with total assets reaching $96.1 billion, representing a substantial increase compared to previous years.

Reported Total Asset Turnover

The reported total asset turnover ratio exhibited a declining trend overall. Starting at 2.15 in 2020, the ratio decreased steadily, reaching 1.66 in 2025. This decline suggests that the company generated less sales per dollar of assets over time, particularly marked by a notable drop from 1.99 in 2024 to 1.66 in 2025.

Adjusted Net Sales

Adjusted net sales followed a trajectory similar to net sales, with continuous growth from $110.6 billion in 2020 to $156.9 billion in 2023. There was a downturn in 2024 to $152.4 billion, followed by a recovery to $159.4 billion in 2025. This reflects a temporary reduction in sales before regaining momentum.

Adjusted Total Assets

Adjusted total assets increased gradually from $51.1 billion in 2020 to $76.2 billion in 2024, aligned closely with the pattern of total assets. A sharp rise occurred in 2025 with adjusted total assets reaching $95.9 billion, paralleling the jump seen in reported total assets.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio mirrored the reported figure, declining from 2.16 in 2020 to 1.66 in 2025. The ratio was relatively stable between 2021 and 2024, fluctuating slightly around 2.0 to 2.12, but then declined sharply in the final year, indicating decreased efficiency in using assets to generate sales.

Current Assets

There was a notable increase in current assets from 19,810 million USD in early 2020 to 32,471 million USD by early 2023, indicating growth in short-term resources. However, a dip occurred in early 2024 to 29,775 million USD, followed by a recovery to 31,683 million USD in early 2025, suggesting some volatility in asset levels.

Current Liabilities

Current liabilities increased significantly from 18,375 million USD in 2020 to a peak of 28,693 million USD in early 2022. This was followed by a sharp decline to 23,110 million USD in early 2023 and a further gradual decrease to 22,015 million USD in early 2024. However, by early 2025, current liabilities surged again to 28,661 million USD, reflecting fluctuations in short-term obligations.

Reported Current Ratio

The reported current ratio showed variability over the period, starting at 1.08 in early 2020 and improving to 1.23 in early 2021. It then declined to 1.01 in early 2022, suggesting a tightening liquidity position. The ratio recovered strongly to 1.41 by early 2023 and slightly decreased to 1.35 in early 2024, before dropping again to 1.11 in early 2025, indicating fluctuating but generally moderate liquidity.

Adjusted Current Liabilities

Adjusted current liabilities followed a similar pattern to the reported figures but remained consistently lower. The values rose from 16,259 million USD in 2020 to a maximum of 25,097 million USD in early 2022, then decreased to 20,046 million USD in early 2023 and further to 19,253 million USD in early 2024. By early 2025, they increased substantially again to 26,051 million USD, mirroring the volatility seen in reported liabilities.

Adjusted Current Ratio

The adjusted current ratio demonstrated higher liquidity levels compared to the reported ratio throughout the period. It increased from 1.22 in early 2020 to 1.40 in early 2021, then declined to 1.16 in early 2022. A pronounced improvement to 1.62 occurred in early 2023, followed by a slight decrease to 1.55 in 2024 and a further decline to 1.22 in 2025, highlighting variability but overall safer short-term liquidity conditions when adjustments are considered.

The financial data demonstrates evolving trends in the debt and equity structure over the years. Total debt has shown a consistent increase from 31,483 million US dollars in early 2020 to 53,383 million US dollars by early 2025, indicating a steady accumulation of liabilities over the period.

Stockholders' equity has fluctuated considerably, initially presenting a deficit of 3,116 million US dollars in 2020, shifting to a positive value of 3,299 million US dollars in 2021, then declining again into a deficit posture of 1,696 million US dollars in 2022. In subsequent years, equity returned to positive territory, reaching 6,640 million US dollars by 2025. This volatility suggests significant variations in retained earnings, adjustments, or other components affecting equity.

Reported Debt to Equity Ratio

This ratio is irregularly reported but highlights substantial fluctuation when available. For example, it jumped from 11.29 in 2021 to 27.65 in 2023, increasing further to 42.25 in 2024, before declining sharply to 8.04 in 2025. These swings reflect changes in the relative magnitudes of reported debt and equity, emphasizing periods of leveraged expansion and subsequent equity strengthening or debt reduction.

Adjusted Total Debt

Adjusted total debt, which likely incorporates additional liabilities or off-balance sheet items, increased from 37,377 million US dollars in 2020 to 62,290 million US dollars in 2025. This indicates a broader rise in the company's financial obligations than reflected by the raw total debt figures alone.

Adjusted Stockholders’ Equity

The adjusted equity also displayed volatility but follows an overall upward trend, starting from a slight deficit of 433 million US dollars in 2020 to a positive 10,943 million US dollars in 2025. This suggests that after accounting adjustments, the company's net asset position improved substantially over the analyzed period.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio fluctuated significantly: values include 6.25 in 2021, a peak at 18.77 in 2022, a reduction to 9.46 in 2023, a modest rise to 11.99 in 2024, and falling to a low of 5.69 in 2025. Despite periodic increases, the trend towards the end of the period indicates an improving balance between debt and equity on an adjusted basis.

Overall, the data portrays a company that has been increasing its leverage over time while experiencing variability in equity levels. The adjustments to both debt and equity reveal a clearer picture of improvement in net asset value and a better ratio between debt and equity in the later years. Ratios indicate a shift towards reduced financial risk by early 2025 compared to peak leverage points in prior years.

Total Debt

The total debt exhibited a consistent upward trajectory from 31,483 million USD in February 2020 to 53,383 million USD in February 2025. This steady increase indicates a growing reliance on debt financing over the period analyzed.

Total Capital

Total capital showed fluctuations across the periods, starting at 28,367 million USD in February 2020, peaking at 45,155 million USD in January 2024, and reaching 60,023 million USD in February 2025. Despite some variability, the overall trend points to a substantial increase in capital employed.

Reported Debt to Capital Ratio

The reported debt to capital ratio demonstrated some volatility, beginning at 1.11 in February 2020, decreasing to a low of 0.89 in February 2025. This downward movement suggests an improvement in the capital structure efficiency, with debt comprising a relatively smaller proportion of total capital by the end of the period.

Adjusted Total Debt

Adjusted total debt, which likely incorporates off-balance sheet or other debt-like obligations, also rose steadily from 37,377 million USD to 62,290 million USD. The pattern mirrors that of total debt, underscoring increased leverage on an adjusted basis.

Adjusted Total Capital

Adjusted total capital increased from 36,944 million USD to 73,233 million USD, showing growth similar to the reported total capital but with a higher magnitude. This suggests additional capital considerations factored into the adjustments, leading to a broader base of capital.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio decreased from 1.01 to 0.85 over the five-year period. While slightly higher than the reported ratio, the declining trend indicates an improved balance between debt and capital when factoring in adjusted measures, reflecting a strengthening financial position in terms of leverage management.

The analysis of the financial data over the six-year period reveals notable fluctuations and trends in the company's assets, equity, and leverage ratios.

Total Assets

The total assets exhibited a growth trend overall, increasing from US$51,236 million in early 2020 to US$96,119 million by early 2025. The growth was steady, with a significant jump from 2024 to 2025, indicating expansion or acquisition activities that boosted the asset base substantially.

Stockholders’ Equity (Deficit)

The stockholders’ equity showed considerable volatility. Starting with a negative balance of -US$3,116 million in 2020, it turned positive in 2021 at US$3,299 million, dropped back to a deficit in 2022 (-US$1,696 million), then recovered again through 2023 and 2024 with positive values, and finally significantly improved to US$6,640 million in 2025. This pattern suggests episodic changes in retained earnings, possibly due to net losses or large distributions in some years followed by recovery periods.

Reported Financial Leverage

The reported financial leverage ratio displays sharp fluctuations, with missing data for some years. It was very high at 21.39 in 2021, spiked further to 48.94 in 2023, peaked at 73.3 in 2024, and then dramatically decreased to 14.48 in 2025. These swings indicate periods of high reliance on debt financing relative to equity, followed by a deleveraging phase in the latest year.

Adjusted Total Assets

Adjusted total assets closely tracked the reported total assets, showing a consistent upward trend from US$51,097 million in 2020 to US$95,850 million in 2025. This confirms the underlying asset growth even after adjustments.

Adjusted Stockholders’ Equity (Deficit)

The adjusted equity values provide a smoother view of equity changes, starting slightly negative at -US$433 million in 2020, improving notably to US$6,948 million in 2021, then declining to US$2,465 million in 2022 before steadily rising to a high of US$10,943 million in 2025. This upward trend in adjusted equity reflects overall strengthening of the company’s financial position when adjusted for special items or reclassifications.

Adjusted Financial Leverage

The adjusted financial leverage also fluctuated but remained generally lower than the reported leverage. Starting at 10.11 in 2021, it rose sharply to 29.02 in 2022, decreased to 14.29 in 2023, and showed moderate increases to 17.5 in 2024 before declining sharply to 8.76 in 2025. This pattern indicates periods of increased debt relative to adjusted equity, followed by significant deleveraging in the latest period.

Overall, the company experienced asset growth coupled with significant volatility in equity positions and leverage ratios. The sharp swings in financial leverage reflect strategic financing decisions, possibly aimed at capital structure optimization. The recent trends indicate strengthening equity and reduced leverage, which may imply an improved risk profile and enhanced financial stability.

Net Earnings

The net earnings exhibit a generally upward trend from 11,242 million US dollars in February 2020, peaking at 17,105 million US dollars in January 2023. Subsequently, there is a decline observed in the last two periods, with net earnings falling to 15,143 million US dollars in January 2024 and further to 14,806 million US dollars in February 2025.

Net Sales

Net sales show consistent growth over the period, increasing from 110,225 million US dollars in February 2020 to 159,514 million US dollars in February 2025. This represents a steady expansion in revenue, although some periods show slightly slower growth, notably between January 2023 and January 2024 when sales declined marginally before rising again.

Reported Net Profit Margin

The reported net profit margin fluctuates throughout the timeline. It starts at 10.2% in February 2020, decreases to 9.74% in January 2021, then recovers to 10.87% during both January 2022 and January 2023. The margin declines again to 9.92% by January 2024 and further to 9.28% in February 2025, indicating a weakening profitability relative to sales in the most recent years.

Adjusted Net Earnings

Adjusted net earnings follow a similar pattern to net earnings, rising from 11,831 million US dollars in February 2020 to a peak of 16,919 million US dollars in January 2022. After a slight decrease to 16,697 million in January 2023, the figures decline more sharply to 14,852 million in January 2024 and 13,963 million in February 2025, reflecting adjustments made for non-recurring items but overall consistent trends with reported earnings.

Adjusted Net Sales

Adjusted net sales closely mirror net sales, increasing steadily from 110,559 million US dollars in February 2020 to 159,362 million in February 2025, with minor fluctuations. This reinforces the observation that revenue growth is sustained despite occasional variations in reported figures.

Adjusted Net Profit Margin

The adjusted net profit margin shows more variability compared to the reported margin. It starts higher at 10.7% in February 2020, falls to 9.81% in January 2021, rises to a peak of 11.14% in January 2022, then declines to 10.64% in January 2023. Following this, the margin decreases more notably to 9.75% in January 2024 and 8.76% in February 2025. This trend indicates that profitability excluding extraordinary items has diminished over the latest periods, signaling potential challenges in maintaining cost efficiency or pricing power.

Overall Insights

The data reflects a company experiencing solid revenue growth over the years, with net and adjusted sales progressively increasing. Profitability margins, both reported and adjusted, show a peak around 2022 and early 2023 but face declining trends thereafter. Net earnings and adjusted net earnings follow this pattern, peaking before declining in recent periods. The diminishing profit margins despite growing sales suggest potential increases in costs, pressure on pricing, or operational inefficiencies impacting net profitability. The consistent increase in sales indicates strong market demand or expansion efforts, but the declining margins warrant careful attention to cost controls and strategic pricing.

Net Earnings

Net earnings have generally increased from 11,242 million US dollars in early 2020 to a peak of 17,105 million in early 2023. However, there is a noticeable decline in the most recent periods, dropping to 15,143 million in early 2024 and further to 14,806 million in early 2025. This indicates a period of growth followed by some contraction in profitability.

Stockholders’ Equity (Deficit)

The stockholders’ equity shows significant volatility. It was negative at -3,116 million in early 2020, shifted to a positive 3,299 million by early 2021, reverted to a negative figure of -1,696 million in early 2022, and then returned to positive territory in subsequent years, reaching 6,640 million by early 2025. These fluctuations reflect changing equity positions that could be influenced by factors such as retained earnings, share repurchases, or other equity transactions.

Reported Return on Equity (ROE)

The reported ROE figures indicate extremely high and volatile returns, with a value of 1,095% in early 2023, increasing further to 1,450% in early 2024, and then declining sharply to 223% in early 2025. Such drastic variations suggest the influence of a low or negative equity base in the denominator, causing the ROE to be disproportionately high and unstable, thus limiting its reliability as a performance metric during this period.

Adjusted Net Earnings

Adjusted net earnings follow a similar trend to net earnings, with growth from 11,831 million in 2020 to a peak of 16,919 million in early 2022, followed by a moderate decline to 16,697 million in early 2023 and a sharper decrease to 13,963 million in early 2025. This trend suggests that adjustments, likely for one-time items or non-recurring expenses, have a consistent but slightly smoother effect on reported profits.

Adjusted Stockholders’ Equity (Deficit)

Adjusted stockholders’ equity reveals a marked improvement over time. From a deficit of 433 million in 2020, it rose sharply to 6,948 million in early 2021, then declined to 2,465 million in early 2022, before increasing steadily to reach 10,943 million in early 2025. This growth demonstrates enhanced financial stability when adjustments are considered, possibly reflecting better underlying equity strength.

Adjusted Return on Equity (ROE)

Adjusted ROE, while also volatile, presents more moderate values than the reported ROE. It climbed sharply from 188% in early 2021 to 686% in early 2022, then declined to 314% and 341% in the subsequent years, and finally reduced to 128% in early 2025. These levels, although still high, suggest improved return on the equity base when adjusted for unusual items, yet the declining trend signals reduced profitability relative to equity in recent periods.

The analysis of the annual financial data reveals several notable trends and changes over the six-year period.

Net Earnings

Net earnings show a general upward trend from 11,242 million USD in 2020 to a peak of 17,105 million USD in 2023. However, this is followed by a decline in subsequent years, dropping to 15,143 million USD in 2024 and further to 14,806 million USD in 2025.

Total Assets

Total assets have consistently increased over the years, starting at 51,236 million USD in 2020 and rising substantially to 96,119 million USD by 2025. This steady growth indicates ongoing asset accumulation or acquisition.

Reported Return on Assets (ROA)

Reported ROA exhibits volatility, with an initial high of 21.94% in 2020, followed by a drop to 18.23% in 2021. It then climbs to a peak of 22.86% in 2022 before declining steadily to 15.4% by 2025. This pattern suggests fluctuating efficiency in generating earnings from assets.

Adjusted Net Earnings

Adjusted net earnings follow a similar pattern to net earnings, increasing from 11,831 million USD in 2020 to a high of 16,919 million USD in 2022, then slightly diminishing to 13,963 million USD in 2025. The adjustments seem to smooth out some of the volatility but do not alter the overall trend.

Adjusted Total Assets

Adjusted total assets closely mirror the trend in reported total assets, increasing from 51,097 million USD in 2020 to 95,850 million USD in 2025, confirming the consistent asset growth.

Adjusted Return on Assets (ROA)

Adjusted ROA generally follows the trend of reported ROA but tends to be slightly higher in early years and lower in later years. It rises from 23.15% in 2020 to 23.65% in 2022 before progressively declining to 14.57% in 2025, highlighting a decrease in asset profitability over time when adjustments are considered.

Overall, the data demonstrates a period of growth in earnings and assets up to the early 2020s, followed by a recent decline in earnings and profitability despite continued asset expansion. The steady increase in assets contrasted with declining returns on those assets suggests potential challenges in maintaining efficient asset utilization or increased investment in lower-yielding assets in recent years.