Home Depot Inc. (NYSE:HD)

The quarterly financial data exhibits several notable trends for key financial metrics over the periods analyzed.

Return on Assets (ROA)

The ROA shows a strong positive presence starting from early 2020, with values initially at 21.94% in February 2020. It maintains a relatively stable upward trend through 2021 and into early 2023, peaking around 22.86% in May 2022. Following this peak, there is a gradual decline evident through 2023 and into mid-2025, ending near 14.62% by August 2025. This suggests the company's efficiency in generating profit from its assets was robust initially but experienced a marked reduction in later periods.

Financial Leverage

Financial leverage shows significant volatility across the quarters. After some early missing data, leverage peaks dramatically at 319.94 in October 2021, representing a substantial increase in the company's use of debt relative to equity. Following this spike, leverage fluctuates with sharp decreases and increases, settling into a declining pattern from mid-2023 onwards, reaching a low point of 9.38 by August 2025. This indicates potentially aggressive financing strategies mid-period, followed by a consolidation or deleveraging phase in recent periods.

Return on Equity (ROE)

ROE demonstrates extreme volatility and high values in the periods where data is available. It starts with values in the hundreds and thousands percent range from late 2020 to early 2022, peaking at 7124.47% in October 2021. Thereafter, there is a sharp decline but the metric remains elevated relative to conventional standards, fluctuating between roughly 137% and 1450% through the latter half of the timeline. Despite the general downtrend post-peak, the persistently high ROE could reflect factors such as high financial leverage or accounting anomalies that inflate equity returns.

In summary, the data indicate that the company experienced very high profitability metrics as indicated by ROE and ROA in early periods, accompanied by extremely high and fluctuating financial leverage. Over subsequent quarters, a reduction in profitability and leverage is observed. The trends suggest a phase of aggressive capital structure management followed by stabilization, but the persistently elevated ROE relative to typical industry benchmarks warrants further investigation to understand underlying drivers or risks.

Net Profit Margin

The net profit margin demonstrates a relatively stable pattern with minor fluctuations over the periods reported. Starting with a value of 10.2% in May 2020, it slightly declined to 9.79% by August 2020, then gradually increased to a peak of around 10.88% in mid-2022. Following this peak, the margin exhibited a gradual downward trend, decreasing steadily to 8.86% by August 2025. This indicates some compression in profitability margins over recent periods despite generally remaining close to or above the 9% level.

Asset Turnover

The asset turnover ratio indicates the efficiency of asset utilization to generate sales. The ratio began at 2.15 in May 2020 and then declined to around 1.87 by early 2021. Thereafter, it experienced moderate fluctuations generally within the 1.9 to 2.1 range through mid-2023, implying relative consistency in asset use efficiency. From early 2024 onwards, the ratio sharply declined to approximately 1.57 by October 2024, with a slight recovery to about 1.65 by August 2025. Overall, asset turnover shows some weakening in the most recent periods, suggesting a decrease in the efficiency of asset use.

Financial Leverage

The financial leverage ratio showed considerable volatility and unusually high values in several instances. Initially not reported, significant spikes are observed with values such as 43.6 (January 2021), 70.56 (May 2022), and an extremely high figure of 319.94 in mid-2022, which appears to be an outlier or data anomaly. Excluding this outlier, the leverage ratio tends to fluctuate substantially from moderate levels around 20-70 to lower levels around 9-16 in the most recent periods. The trend suggests periods of aggressive leverage interspersed with marked reductions, possibly reflecting changes in financing structure or balance sheet adjustments.

Return on Equity (ROE)

ROE values are extraordinarily high throughout the dataset, reaching peak values such as 813.68% (January 2021), 1539.9% (May 2022), and an extreme 7124.47% in mid-2022, again indicating possible data anomalies or unusual financial conditions. Despite these spikes, the general pattern shows extreme volatility with significant decreases following peaks. In more recent periods, the ROE decreased but remained elevated relative to typical industry norms, ranging between approximately 137% to 334% by August 2025. Such elevated ROE figures, albeit fluctuating, suggest extraordinary returns to equity holders, possibly leveraged by the high financial leverage and operational leverage.

The quarterly financial data reveals several notable trends across the analyzed periods.

Tax Burden

The tax burden ratio remains consistently stable at 0.76 from February 2, 2020, onward, indicating a steady proportion of earnings retained after tax over the observed timeframe.

Interest Burden

The interest burden ratio shows a slight declining trend. Beginning at 0.92 in February 2020, it gradually decreases to 0.89 by August 2025, suggesting a marginal increase in interest expenses relative to earnings before interest and taxes over time.

EBIT Margin

The EBIT margin fluctuates moderately but maintains a range roughly between 13.15% and 15.35%. The margin peaks around early 2022 and then progressively declines, reaching the lower boundary of the range by late 2024 and early 2025. This pattern may imply tightening operating profitability in recent quarters.

Asset Turnover

The asset turnover ratio shows variability without a clear long-term trend. Initial values near 2.15 decrease to around 1.87 to 1.88 in mid-2020, recover towards 2.06 in early 2023, and then decline again to approximately 1.64 by August 2025. These shifts reflect changes in the efficiency with which assets generate revenue, with some periods of improved performance followed by declines.

Financial Leverage

Financial leverage presents significant volatility. After initial sparse data, leverage spikes to extremely high levels (over 300 times) intermittently, such as near the end of 2022. Subsequently, it exhibits a downward trend towards lower ratios around 9.38 by August 2025. The large fluctuations could indicate changes in capital structure or temporary accounting effects impacting equity levels.

Return on Equity (ROE)

The reported ROE values are unusually high and volatile, with peaks reaching beyond 7000% in late 2022. Despite subsequent declines, ROE remains elevated relative to typical expectations, suggesting either extraordinary gains, very low equity bases, or exceptional financial leverage effects. The trend shows diminishing but still substantial returns through mid-2025.

Overall, the data indicates a combination of stable tax burden, modestly increasing interest expenses relative to EBIT, fluctuating operational efficiency, volatile capital structure, and highly variable but elevated returns on equity. The extreme leverage and ROE figures warrant further investigation to understand underlying causes and sustainability.

Net Profit Margin

The net profit margin displays a generally stable but slightly declining trend over the observed periods. Starting from a peak of 10.87% in early 2022, it remains mostly around 10.8% through mid-2022 to early 2023. After this plateau, a gradual decrease is evident, falling from approximately 10.75% in early 2023 to 8.86% by mid-2025. This indicates a modest erosion in profitability relative to sales over time.

Asset Turnover

Asset turnover ratios show variability with an initial decline from 2.15 early in the observed timeframe down to 1.87 by early 2020. Thereafter, the ratio generally stabilizes, hovering around 2.0 through mid-2022 with slight fluctuations. From early 2023 onwards, a marked decline occurs, reaching as low as 1.57 by late 2024. A modest recovery is noted thereafter, with values climbing to around 1.65 by mid-2025. This trend suggests decreasing efficiency in utilizing assets to generate sales towards the more recent periods, with a partial rebound towards the end.

Return on Assets (ROA)

The return on assets initially experiences a downward trend from 21.94% to about 18.23% between early 2020 and mid-2021. Following this decline, ROA increases steadily, peaking at 22.86% in mid-2022. Afterward, a gradual reduction in ROA is observed, dipping to 14.62% by mid-2025. This pattern indicates that while asset profitability improved for a period, it has since weakened significantly, reflecting reduced overall effectiveness in asset utilization to generate net income in recent quarters.

Tax Burden

The tax burden ratio is consistently stable at 0.76 across all reported periods, indicating a steady proportion of income paid in taxes without fluctuation over the observed quarters.

Interest Burden

The interest burden ratio starts at 0.92 in early reported periods and shows a slight declining trend over time, reaching 0.89 in the latest quarter. This indicates a gradual reduction in the impact of interest expenses relative to earnings before tax, suggesting improving management of interest costs or changing debt structure.

EBIT Margin

The EBIT margin shows an overall moderate increase from approximately 14.44% to a peak near 15.35% in mid-periods, followed by a slow decline toward 13.15% in the most recent quarter. This pattern reflects a phase of improving operational profitability that later experiences some erosion, potentially due to rising costs or pricing pressures.

Asset Turnover

Asset turnover begins at 2.15 and experiences a decline to around 1.87-1.88 in early periods, then recovers somewhat to about 2.06 but ultimately trends downward in the latest quarters to approximately 1.64. The initial drop followed by partial recovery and a later decline may suggest fluctuating efficiency in utilizing assets to generate sales, possibly influenced by changes in asset base or sales performance.

Return on Assets (ROA)

ROA follows a trajectory similar to EBIT margin and asset turnover, starting near 21.94%, dipping to below 18.7%, then rising again to around 22.86%, and subsequently declining steadily to about 14.62% in the latest data point. This indicates varying effectiveness in asset utilization to generate net income over time, with a notable decrease in recent periods that could signal profitability challenges or asset base expansion not matched by income growth.

Tax Burden

The tax burden ratio remains constant at 0.76 throughout the available periods, indicating stable effective tax rates and consistent tax impacts on pretax earnings over time.

Interest Burden

The interest burden ratio shows a slight decreasing trend, starting at 0.92 in early 2020, rising modestly to 0.94 through mid-2021, and then gradually declining to 0.89 by mid-2025. This suggests a marginal improvement in the company's ability to manage interest expenses relative to earnings before interest and taxes, although the recent decline indicates slightly higher interest costs or reduced operating income coverage in the later periods.

EBIT Margin

The EBIT margin percentages indicate a general upward trend from 14.44% in early 2020, peaking at around 15.35% in mid-2022, followed by a slow and steady decline down to 13.15% by mid-2025. This pattern reflects an improvement in operating profitability until mid-2022, thereafter experiencing pressure or operational challenges leading to lower operating margins in subsequent periods.

Net Profit Margin

The net profit margin exhibits a somewhat parallel movement to EBIT margin but at lower percentages, starting at 10.2% in early 2020, increasing to a peak of approximately 10.88% between mid-2021 and mid-2023, then declining steadily to 8.86% by mid-2025. This implies that while the company achieved improved bottom-line profitability during the middle period, it faced increasing pressures, potentially from costs or non-operating factors, resulting in reduced net margins later on.