Home Depot Inc. (NYSE:HD)

Debt to Equity Ratio

The debt to equity ratio exhibits substantial volatility over the observed periods. Beginning with values around 23.01 in early 2020, it fluctuates dramatically, reaching peaks as high as 173.11 and 116.72 in later quarters. However, there is a clear declining trend towards the most recent periods, where the ratio drops to 4.91 by August 2025. This indicates periodic rises in leverage followed by efforts to reduce equity-based debt exposure, concluding with a significantly lower leverage position.

Debt to Equity Ratio Including Operating Lease Liability

This metric follows a similar trajectory to the standard debt to equity ratio but consistently presents slightly elevated values, reaching an extreme of 199.91 before descending later. The trend toward reduction after peak levels is consistent, descending to 5.75 in the most recent period. The inclusion of lease liabilities adds to the company's leverage level but does not alter the overall pattern of a peak followed by a significant decline.

Debt to Capital Ratio

The debt to capital ratio demonstrates minor fluctuations in the early periods, predominantly remaining near 1.00 or slightly above. From approximately mid-2020, the ratio shows a gradual downward trend, falling from around 0.97 to 0.83 by August 2025, indicating a reduction in debt relative to total capital. This suggests a measured improvement in the company’s capital structure with less reliance on debt.

Debt to Capital Ratio Including Operating Lease Liability

This ratio replicates the trend observed in the standard debt to capital ratio but with marginally higher values due to the inclusion of lease liabilities. It declines steadily from above 1.00 to 0.85 by the last period, signaling enhanced capital strength even when operating leases are considered part of debt obligations.

Debt to Assets Ratio

The debt to assets ratio fluctuates moderately, initially increasing from 0.55 to around 0.61, then stabilizing near 0.56 in recent quarters. This denotes a consistent proportion of assets financed by debt over time, without pronounced shifts in asset leverage.

Debt to Assets Ratio Including Operating Lease Liability

Including operating leases, the debt to assets ratio is higher—rising from about 0.66 to roughly 0.73 during mid-periods—followed by a slight decrease stabilizing near 0.61–0.62. The elevated levels reflect additional commitments recognized as liabilities, but the stable trend indicates no major changes in total asset leverage.

Financial Leverage

Financial leverage reflects high variability, with values rising from approximately 20 to peaks over 300, signaling periods of significant balance sheet gearing. Nevertheless, from these peaks, there is a strong downward trend, reducing leverage to below 10 toward the latest periods. This pattern suggests temporary higher borrowing or off-balance-sheet financing that was later curtailed, resulting in less concentrated financial risk.

Interest Coverage Ratio

Interest coverage remains relatively strong throughout the periods, starting around 13 and improving gradually to about 17 in mid-periods. Subsequently, there is a steady decline down to approximately 8.85 in the most recent quarter. Despite the decrease, the ratio maintains a level indicating fair ability to cover interest expenses, though the downward trend may signal increased interest or reduced earnings before interest and taxes over time.

The financial data reveals several notable trends in the company’s debt levels, equity position, and leverage ratios over the examined periods.

Total Debt

Total debt exhibited a general upward trajectory from May 2019 through to early 2021, increasing from approximately $28.3 billion to over $40 billion by January 2022. After reaching a peak near $41 billion, debt levels fluctuated modestly but remained elevated, with a subsequent significant rise in late 2023 and early 2024 periods. By August 2024, total debt surged markedly to above $55 billion, which indicates a substantial increase in borrowings or financing activities during the most recent quarters.

Stockholders’ Equity

Stockholders’ equity demonstrated considerable volatility throughout the timeframe. Initially, the company reported negative equity balances through early 2020, reflecting a deficit position. Equity moved into positive territory starting in late 2020 through early 2021, suggesting improvements in net asset value during this period. However, large fluctuations occurred afterward, with equity sometimes declining sharply into deficit or marginally positive before steadily increasing post-2022. From 2022 to mid-2025, there has been a consistent upward trend, culminating in a significant increase in equity levels to over $10.6 billion by the latest period, indicating enhanced capitalization or retained earnings accumulation.

Debt to Equity Ratio

The debt to equity ratio presents an erratic pattern, heavily influenced by fluctuations in equity values. Early in the data series, the ratio was not available, but from late 2020 onwards it shows very high levels, strongly reflecting the prior equity deficit. The ratio spiked to extremely elevated values exceeding 170, indicating an extreme imbalance with very high debt relative to equity at certain points. Subsequent quarters saw the ratio drop sharply to more moderate but still high levels around 20 to 40, again indicative of elevated financial leverage. Throughout 2023 and 2024, the ratio consistently declined, reaching levels below 10 in the latest periods, corresponding with the equity recovery and partial stabilization of debt. The trend suggests a gradual improvement in capital structure, moving towards lower leverage over time.

In summary, the company has progressively increased its total debt, reaching new highs in recent quarters. Simultaneously, significant fluctuations in stockholders' equity have impacted leverage ratios, which initially reflected extreme leverage but have shown a trend towards stabilization and improvement with rising equity balances. The decreasing debt to equity ratio in the most recent periods indicates a mitigation of financial risk and a strengthening equity base relative to debt.

The analysis of the quarterly financial data reveals several notable trends in the company's debt and equity structure over the specified period.

Total debt (including operating lease liability)

This metric exhibited a generally increasing trend from May 2019 through the early months of 2024, starting at approximately $34.2 billion and peaking at around $64.6 billion by July 2024. After July 2024, a gradual decline in total debt is observed, reducing to approximately $61.3 billion by August 2025. The growth in debt from mid-2019 through mid-2024 indicates a significant reliance on financing likely associated with operational or expansion activities, while the subsequent reduction suggests efforts to deleverage.

Stockholders’ equity (deficit)

The equity position fluctuated considerably over the reporting period, beginning with a deficit of about -$2.1 billion in May 2019 and improving to a positive equity balance by August 2020, reaching as high as approximately $3.3 billion by January 2021. However, the equity declined sharply again into negative territory by early 2022 before steadily increasing from mid-2022 onward, culminating in a positive balance exceeding $10.6 billion by August 2025. This volatility in equity reflects periods of financial strain followed by recovery, potentially tied to profitability, retained earnings, and market conditions.

Debt to equity ratio (including operating lease liability)

The debt-to-equity ratio reveals substantial volatility, reflecting the fluctuations in both debt levels and equity base. Early data is missing, but from January 2021 onwards, the ratio experienced extreme spikes notably reaching nearly 200 in May 2022, indicating that debt was almost 200 times equity at that point, which confirms the negative equity status. Post-May 2022, this ratio improved significantly, declining to single digits by mid-2025. This sharp decrease in the ratio suggests stronger equity capitalization and/or reduction in debt relative to equity in the more recent periods, marking a positive shift towards financial stability.

Overall, the company demonstrated increasing leverage through growing debt levels in the earlier years, accompanied by swings in equity that at times resulted in a deficit. However, from mid-2022 onward, there is clear evidence of financial recovery characterized by rising equity and a notable reduction in the debt-to-equity ratio, implying improved capital structure and potentially enhanced creditworthiness.

Total Debt

The total debt exhibits an overall upward trend from May 2019 to August 2025, increasing from approximately $28.3 billion to over $52 billion. Notable increments occurred between Feb 2024 and Jul 2024, where total debt jumped from around $44.1 billion to $55.7 billion, and again remained elevated thereafter. Despite minor fluctuations, the debt level generally rose, reflecting increased leverage or financing activities over the period.

Total Capital

Total capital also increased consistently from May 2019 through Aug 2025, starting at about $26.1 billion and rising to nearly $63 billion by the end of the period. The increase in total capital outpaced the growth in total debt, especially from Jan 2024 onwards, where total capital surged sharply. This indicates broad expansion of the asset base or equity alongside debt.

Debt to Capital Ratio

The debt to capital ratio ranged between approximately 0.87 and 1.11 over the analyzed periods. Initially, the ratio was above 1.0 through the first year (2019 to early 2020), indicating total debt slightly exceeded total capital, but it began a steady decline from Aug 2020 onwards, reaching below 0.9 by 2024 and further to 0.83 by Aug 2025. This downward trend suggests an improving capital structure with less relative debt, implying reduced financial risk or a stronger equity position over time.

Summary of Trends and Insights

The data reveals a consistent increase in both debt and capital, signaling growth in the company's financial scale. However, the decreasing debt to capital ratio reflects a strategic reduction in leverage intensity despite the higher absolute debt levels. This may indicate efforts to strengthen the balance sheet by bolstering equity or assets faster than debt accumulation. The pronounced increase in capital relative to debt since early 2024 highlights a possible shift towards lower financial risk and improved capitalization.

The financial data reveals several key trends in the company's debt and capital structure over the analyzed periods.

Total Debt (including operating lease liability)

The total debt exhibited an overall upward trend from May 2019 through to mid-2023, increasing from approximately $34.2 billion to a peak near $52.2 billion by April 2024. Following this peak, there is a notable decline with values dropping to around $61.3 billion by August 2025. Throughout the timeline, fluctuations are evident, including some temporary decreases, but the general pattern is an increase in total debt over the entire period.

Total Capital (including operating lease liability)

Total capital also shows a discernible increase over the periods, moving from $32.1 billion in May 2019 to nearly $69.0 billion by late 2024, then slightly rising to about $72.0 billion by August 2025. This indicates growth in the company's capital base, which parallels the rise in total debt but demonstrates a steadier incremental increase with fewer abrupt fluctuations.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio starts significantly above 1.0 in the initial period (1.07 in May 2019), suggesting that the reported debt exceeded total capital measures, which may imply a particular accounting treatment or classification of liabilities and capital. Over the course of the data, this ratio consistently decreases, trending downward to 0.85 by August 2025. This decline indicates an improvement in the capital structure, with debt comprising a smaller proportion of the combined capital and liability base over time. The ratio consistently remains below 1.0 from early 2021 onwards, demonstrating a more conventional balance where debt is less than total capital.

In summary, the observed data suggests that while total debt and capital both expanded significantly during the period, the reduction in the debt to capital ratio points to a relative strengthening of the financial structure, with capital growing at a faster pace or debt growth moderating in later periods. This trend may reflect strategic financial management focused on improving leverage metrics and financial stability.

The financial data reveals several noteworthy trends regarding the company's leverage and asset base over the analyzed periods.

Total debt

Total debt exhibits a generally increasing trajectory from May 2019 through mid-2024, rising from approximately $28.3 billion to a peak of $55.7 billion in July 2024. However, following this peak, there is a gradual reduction in debt levels, decreasing to around $52.3 billion by August 2025. This suggests a phase of significant borrowing or debt accumulation over the initial years, followed by some deleveraging or debt repayment in the later periods.

Total assets

Total assets have shown a steady increase overall, growing from roughly $51.5 billion in May 2019 to surpassing $100 billion by August 2025. This steady asset growth indicates ongoing investment in the company's asset base, supporting operational expansion or other strategic initiatives. The upward trend is relatively uninterrupted, although minor fluctuations are present in some quarters.

Debt to assets ratio

The debt to assets ratio fluctuates within a range of approximately 0.49 to 0.61 throughout the periods. Initially, the ratio hovered around 0.55 to 0.56 until early 2020, after which it peaked at around 0.61 in May 2020, reflecting increased leverage during this period. Subsequently, the ratio generally stabilized near the mid-0.50s range, with occasional rises above 0.56. Notably, despite total debt increasing substantially, the ratio does not escalate proportionally toward the end due to the more rapid growth in total assets. The ratio’s downward shift to approximately 0.52 toward August 2025 points to a favorably improving capital structure, with assets growing faster than liabilities.

In summary, the data indicates a period of increasing leverage followed by a partial reversal, supported by consistent asset growth. This pattern suggests that while the company has taken on more debt in absolute terms, its asset base has expanded sufficiently to maintain a relatively stable and moderate debt-to-assets ratio over time. The recent trend toward reducing leverage may reflect strategic financial management aimed at strengthening the balance sheet.

Total Debt (including operating lease liability)

The total debt demonstrates a generally increasing trend over the observed periods, starting from approximately $34.2 billion in May 2019 and rising to about $61.3 billion by August 2025. There are periods of moderate fluctuation, with some declines such as between May 2020 and August 2020, and again from January 2023 through July 2023. However, the overall direction is upward, reflecting an expanding use of debt financing or lease liabilities over the timeframe.

Total Assets

Total assets show a consistent growth pattern from around $51.5 billion in May 2019 to over $100 billion by August 2025. Midway through the period, there are minor dips, for example between January 2022 and January 2023, but the asset base generally expands steadily, indicating an accumulation of resources or investments contributing to asset growth.

Debt to Assets Ratio (including operating lease liability)

The debt-to-assets ratio fluctuates between 0.58 and 0.73 throughout the periods, with the highest point around February 2020 at 0.73. After this peak, the ratio declines and stabilizes mostly in the range of 0.62 to 0.67, suggesting some improvement in the balance between debt and assets. Toward the later periods, a slight downward trend is observable, falling to approximately 0.61 by August 2025, implying a marginal reduction in leverage relative to assets.

Summary of Financial Trends

The analysis reveals a business progressively increasing both its debt levels and asset base, with assets growing at a slightly faster pace to moderate leverage ratios over time. The initial rise in leverage up to early 2020 might reflect strategic borrowing or lease commitments, possibly in response to business needs or market conditions. Following that, the company exhibits greater stability in leverage, coupled with asset growth, indicative of balanced financial management. The slight decrease in the debt-to-assets ratio towards the end of the period may suggest efforts to improve financial structure or reduce reliance on debt financing relative to asset holdings.

The financial data displays notable variability in key balance sheet metrics over the analyzed quarters. Total assets show an overall increasing trend, starting from approximately $51.5 billion and rising to the range of $99-100 billion by the most recent periods. This growth reflects a significant expansion in the asset base over time, though minor fluctuations are observed between some quarters.

Stockholders’ equity exhibits substantial volatility and pronounced shifts. Initially, equity is reported as negative, with a deficit of approximately -$2.1 billion, gradually improving to positive territory from early 2020 onwards. The equity balance fluctuates significantly thereafter, reaching a low point again around early 2022 but then increases markedly in the latest periods, surpassing $10 billion. These swings indicate periods of either accumulated losses or other equity pressures, followed by recovery and strengthening of the equity base.

Financial leverage ratios are available for selected periods and indicate drastic fluctuations. For example, leverage ratios spike to very high values in certain quarters (exceeding 200 or even 300 in some cases), followed by sharp reductions. The inconsistent leverage measurements suggest episodic variations in the relationship between total assets and equity, likely reflecting the observed swings in equity levels. In some quarters, leverage ratios reach extreme levels, implying either heightened financial risk or accounting effects impacting equity.

Overall, the data reveals a company undergoing significant changes in financial structure, evidenced by asset growth combined with volatile equity positions and erratic leverage ratios. The increasing total assets alongside recovering and eventually robust equity balances suggest an improving capital structure over time, though the considerable leverage variation points to periods of financial stress or structural adjustments.

Total Assets

Steady growth from about $51.5 billion to nearly $100 billion across the analyzed period, highlighting expansion.

Stockholders’ Equity

Initially negative and volatile, with periods of deficit; turns positive and grows significantly in later quarters, indicating recovery in net worth.

Financial Leverage

Very irregular and extreme fluctuations in reported periods, reflecting significant shifts in balance sheet composition and equity levels, implying variable financial risk.

The quarterly financial data reveals several key trends in earnings before interest and tax (EBIT), interest expense, and interest coverage over the observed periods.

Earnings Before Interest and Tax (EBIT)

EBIT values exhibit a generally cyclical pattern with notable fluctuations throughout the time series. Initial values show moderate earnings in early 2019, followed by a decline around early 2020. From mid-2020 onwards, there is a significant increase in EBIT, peaking in mid-2022 and late 2023. However, several dips appear throughout this period, including early 2023 and early 2024. The highest EBIT values occur around mid-2022 and show strength during late 2023 and onward. This pattern suggests operational performance experiences periodic volatility but trends toward higher profitability in the latter periods.

Interest Expense

Interest expense demonstrates a clear upward trend across the quarters. The expense starts at approximately $288 million in mid-2019 and gradually increases to a peak nearing $638 million by late 2024. Occasional slight reductions appear after peak values, but the general trajectory is an incremental rise. This suggests a growing cost of debt or higher borrowing levels over time.

Interest Coverage Ratio

Interest coverage ratios, calculated as EBIT divided by interest expense, initially display strong coverage above 13 times in early 2020. The ratio improves gradually, reaching a peak around 17 times in early 2022, indicating robust ability to meet interest obligations during this period. Following this peak, the ratio exhibits a gradual decline, dropping below 10 times by late 2024. Although the coverage remains healthy overall, the downward trend highlights that rising interest expenses are beginning to exert pressure on the company’s ability to comfortably service its debt relative to earnings.

In summary, the data indicates growing operational earnings with episodic volatility, steadily increasing interest costs, and a correspondingly decreasing interest coverage ratio in the later periods. The interplay of these trends calls for attention to managing increasing debt-related expenses to sustain financial stability while leveraging improved earnings capacity.