Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Long-term Activity Ratios (Summary)
Home Depot Inc., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2026-02-01), 10-K (reporting date: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31).
An examination of long-term investment activity ratios reveals fluctuating performance across the observed period. Several ratios demonstrate initial improvements followed by subsequent declines, while others exhibit more pronounced volatility. Overall, the period suggests a potential shift in asset utilization efficiency.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio generally increased from 5.35 in 2021 to 6.14 in 2023, indicating improved efficiency in generating revenue from fixed assets. However, this was followed by a decrease to 5.84 in 2024, and a slight recovery to 5.97 in 2025, before declining again to 5.88 in 2026. This suggests a potential stabilization around a level slightly below the 2023 peak.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- Similar to the standard net fixed asset turnover, this ratio increased from 4.31 in 2021 to 4.85 in 2022, then remained relatively stable at 4.83 in 2023. A decline to 4.49 in 2024 was observed, followed by a marginal increase to 4.52 in 2025, and a further decrease to 4.42 in 2026. The inclusion of operating lease obligations appears to result in a consistently lower turnover compared to the standard calculation.
- Total Asset Turnover
- The total asset turnover ratio increased from 1.87 in 2021 to 2.10 in 2022, before decreasing to 2.06 in 2023 and 1.99 in 2024. A more substantial decline is evident in 2025, falling to 1.66, and continuing to 1.57 in 2026. This indicates a decreasing ability to generate sales from the company’s total asset base, potentially signaling reduced operational efficiency or increased investment in less productive assets.
- Equity Turnover
- The equity turnover ratio demonstrates significant fluctuation. It was 40.05 in 2021, with no value reported for 2022. A substantial increase to 100.77 in 2023 was followed by a further increase to 146.23 in 2024. However, a sharp decline to 24.02 in 2025 and a continued decrease to 12.85 in 2026 are observed. This volatility suggests a considerable change in the relationship between revenue and equity, potentially linked to shifts in financial leverage or equity structure.
In summary, while initial years showed improvements in asset turnover ratios, a trend of declining efficiency is apparent in the later years of the observed period, particularly concerning total asset and equity turnover. The equity turnover ratio exhibits the most dramatic changes, warranting further investigation into the underlying causes.
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Net Fixed Asset Turnover
Home Depot Inc., net fixed asset turnover calculation, comparison to benchmarks
| Feb 1, 2026 | Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net sales | 164,683) | 159,514) | 152,669) | 157,403) | 151,157) | 132,110) | |
| Net property and equipment | 28,021) | 26,702) | 26,154) | 25,631) | 25,199) | 24,705) | |
| Long-term Activity Ratio | |||||||
| Net fixed asset turnover1 | 5.88 | 5.97 | 5.84 | 6.14 | 6.00 | 5.35 | |
| Benchmarks | |||||||
| Net Fixed Asset Turnover, Competitors2 | |||||||
| Amazon.com Inc. | — | 2.01 | 2.52 | 2.82 | 2.75 | 2.93 | |
| Lowe’s Cos. Inc. | — | 4.74 | 4.89 | 5.53 | 5.05 | 4.68 | |
| TJX Cos. Inc. | — | 7.67 | 8.25 | 8.63 | 9.21 | 6.38 | |
| Net Fixed Asset Turnover, Sector | |||||||
| Consumer Discretionary Distribution & Retail | — | 2.49 | 3.07 | 3.47 | 3.43 | 3.46 | |
| Net Fixed Asset Turnover, Industry | |||||||
| Consumer Discretionary | — | 2.79 | 3.24 | 3.51 | 3.48 | 3.32 | |
Based on: 10-K (reporting date: 2026-02-01), 10-K (reporting date: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31).
1 2026 Calculation
Net fixed asset turnover = Net sales ÷ Net property and equipment
= 164,683 ÷ 28,021 = 5.88
2 Click competitor name to see calculations.
The net fixed asset turnover ratio demonstrates a generally stable performance over the analyzed period, with some fluctuation. Initially, the ratio increased from 2021 to 2023, then experienced a slight decline in subsequent years. This suggests a changing relationship between net sales and net property, plant, and equipment.
- Overall Trend
- The ratio began at 5.35 in 2021 and rose to a peak of 6.14 in 2023. Following this peak, the ratio decreased to 5.84 in 2024, then slightly recovered to 5.97 in 2025, before settling at 5.88 in 2026. This indicates a period of increasing efficiency in asset utilization, followed by a stabilization and minor decrease.
- Year-over-Year Changes
- The largest year-over-year increase occurred between 2021 and 2022, with a rise of 0.65. The increase from 2022 to 2023 was more modest, at 0.14. The subsequent decline from 2023 to 2024 was 0.30, representing the largest single-year decrease in the observed period. The changes from 2024 to 2025 and 2025 to 2026 were relatively small, at 0.13 and -0.09 respectively.
- Relationship to Sales and Asset Base
- Net sales increased consistently from 2021 to 2023, contributing to the initial rise in the turnover ratio. While sales remained high in 2024 and 2025, the ratio decreased slightly, suggesting that the growth in net property and equipment outpaced sales growth during those years. The continued increase in net property and equipment into 2026, coupled with a moderate sales increase, resulted in a further slight decrease in the ratio.
In conclusion, the net fixed asset turnover ratio indicates a generally efficient use of fixed assets to generate sales. The recent stabilization and slight decline warrant continued monitoring to determine if this represents a longer-term trend or a temporary fluctuation.
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Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Home Depot Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Feb 1, 2026 | Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net sales | 164,683) | 159,514) | 152,669) | 157,403) | 151,157) | 132,110) | |
| Net property and equipment | 28,021) | 26,702) | 26,154) | 25,631) | 25,199) | 24,705) | |
| Operating lease right-of-use assets | 9,204) | 8,592) | 7,884) | 6,941) | 5,968) | 5,962) | |
| Net property and equipment (including operating lease, right-of-use asset) | 37,225) | 35,294) | 34,038) | 32,572) | 31,167) | 30,667) | |
| Long-term Activity Ratio | |||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 4.42 | 4.52 | 4.49 | 4.83 | 4.85 | 4.31 | |
| Benchmarks | |||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | |||||||
| Amazon.com Inc. | — | 1.62 | 1.94 | 2.08 | 2.03 | 2.17 | |
| Lowe’s Cos. Inc. | — | 3.91 | 4.04 | 4.60 | 4.15 | 3.90 | |
| TJX Cos. Inc. | — | 3.32 | 3.40 | 3.36 | 3.44 | 2.29 | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | |||||||
| Consumer Discretionary Distribution & Retail | — | 1.97 | 2.33 | 2.55 | 2.52 | 2.55 | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | |||||||
| Consumer Discretionary | — | 2.22 | 2.53 | 2.69 | 2.66 | 2.52 | |
Based on: 10-K (reporting date: 2026-02-01), 10-K (reporting date: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31).
1 2026 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Net sales ÷ Net property and equipment (including operating lease, right-of-use asset)
= 164,683 ÷ 37,225 = 4.42
2 Click competitor name to see calculations.
The net fixed asset turnover ratio, alongside its contributing components of net sales and net property and equipment (including operating lease and right-of-use assets), exhibits a generally stable pattern over the analyzed period, with some fluctuations. Net sales demonstrate an overall increasing trend, while net property and equipment consistently increased year-over-year. The net fixed asset turnover ratio itself shows a moderate degree of variability.
- Net Sales Trend
- Net sales increased from US$132,110 million in 2021 to US$164,683 million in 2026. The largest year-over-year increase occurred between 2021 and 2022, with a growth of approximately 14.4%. Growth rates moderated in subsequent years, with a slight decrease observed between 2023 and 2024, followed by renewed growth in 2025 and 2026.
- Net Property and Equipment Trend
- Net property and equipment, inclusive of operating leases and right-of-use assets, experienced consistent growth throughout the period, rising from US$30,667 million in 2021 to US$37,225 million in 2026. This indicates a continuous investment in fixed assets. The rate of increase appears relatively consistent year-to-year.
- Net Fixed Asset Turnover Ratio Analysis
- The net fixed asset turnover ratio peaked at 4.85 in 2022, suggesting efficient utilization of fixed assets to generate sales. A slight decrease to 4.83 was observed in 2023. The ratio then declined to 4.49 in 2024, potentially indicating a slower rate of sales generation relative to the investment in fixed assets. A minor recovery to 4.52 occurred in 2025, followed by a further decrease to 4.42 in 2026. While fluctuations exist, the ratio remained within a relatively narrow range of 4.31 to 4.85 throughout the six-year period.
The observed trends suggest that while the company continues to invest in its fixed asset base, the efficiency with which these assets generate sales has experienced some variability. The slight decline in the turnover ratio in the later years warrants further investigation to determine the underlying causes, such as changes in sales mix, operational inefficiencies, or increased asset intensity.
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Total Asset Turnover
Home Depot Inc., total asset turnover calculation, comparison to benchmarks
| Feb 1, 2026 | Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net sales | 164,683) | 159,514) | 152,669) | 157,403) | 151,157) | 132,110) | |
| Total assets | 105,095) | 96,119) | 76,530) | 76,445) | 71,876) | 70,581) | |
| Long-term Activity Ratio | |||||||
| Total asset turnover1 | 1.57 | 1.66 | 1.99 | 2.06 | 2.10 | 1.87 | |
| Benchmarks | |||||||
| Total Asset Turnover, Competitors2 | |||||||
| Amazon.com Inc. | — | 0.88 | 1.02 | 1.09 | 1.11 | 1.12 | |
| Lowe’s Cos. Inc. | — | 1.94 | 2.07 | 2.22 | 2.16 | 1.92 | |
| TJX Cos. Inc. | — | 1.78 | 1.82 | 1.76 | 1.71 | 1.04 | |
| Total Asset Turnover, Sector | |||||||
| Consumer Discretionary Distribution & Retail | — | 1.03 | 1.20 | 1.30 | 1.33 | 1.27 | |
| Total Asset Turnover, Industry | |||||||
| Consumer Discretionary | — | 0.86 | 0.93 | 0.97 | 0.96 | 0.88 | |
Based on: 10-K (reporting date: 2026-02-01), 10-K (reporting date: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31).
1 2026 Calculation
Total asset turnover = Net sales ÷ Total assets
= 164,683 ÷ 105,095 = 1.57
2 Click competitor name to see calculations.
The total asset turnover ratio exhibited a fluctuating pattern over the observed period. Initially, the ratio increased from 1.87 in 2021 to 2.10 in 2022, indicating improved efficiency in generating net sales from its asset base. This positive trend was followed by a slight decrease to 2.06 in 2023 and a further decline to 1.99 in 2024. The most significant change occurred between 2024 and 2025, with the ratio falling to 1.66. This downward trend continued into 2026, reaching 1.57.
- Overall Trend
- A clear downward trend in total asset turnover is evident in the later years of the period. While the ratio demonstrated initial improvement, it has consistently decreased since 2022, suggesting a diminishing ability to generate sales relative to the company’s asset base.
- Net Sales Impact
- Net sales increased from 2021 to 2025, but the rate of increase slowed in 2024 and 2025. Despite this growth in sales, the substantial increase in total assets appears to be outpacing sales growth, contributing to the declining turnover ratio.
- Asset Base Impact
- Total assets experienced a moderate increase between 2021 and 2024. However, a substantial increase in total assets is observed between 2024 and 2026, growing from US$76.530 million to US$105.095 million. This significant asset accumulation, without a corresponding proportional increase in net sales, is the primary driver of the declining total asset turnover ratio.
The decreasing total asset turnover ratio warrants further investigation. Potential factors contributing to this trend could include investments in long-term assets that have not yet translated into increased sales, inefficient asset utilization, or a shift in business strategy that prioritizes market share over immediate asset efficiency. Continued monitoring of this ratio, alongside other financial metrics, is recommended to assess the long-term implications of this trend.
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Equity Turnover
Home Depot Inc., equity turnover calculation, comparison to benchmarks
| Feb 1, 2026 | Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net sales | 164,683) | 159,514) | 152,669) | 157,403) | 151,157) | 132,110) | |
| Stockholders’ equity (deficit) | 12,813) | 6,640) | 1,044) | 1,562) | (1,696) | 3,299) | |
| Long-term Activity Ratio | |||||||
| Equity turnover1 | 12.85 | 24.02 | 146.23 | 100.77 | — | 40.05 | |
| Benchmarks | |||||||
| Equity Turnover, Competitors2 | |||||||
| Amazon.com Inc. | — | 1.74 | 2.23 | 2.85 | 3.52 | 3.40 | |
| Lowe’s Cos. Inc. | — | — | — | — | — | 62.35 | |
| TJX Cos. Inc. | — | 6.72 | 7.42 | 7.85 | 8.09 | 5.51 | |
| Equity Turnover, Sector | |||||||
| Consumer Discretionary Distribution & Retail | — | 2.47 | 3.33 | 4.50 | 5.57 | 4.86 | |
| Equity Turnover, Industry | |||||||
| Consumer Discretionary | — | 2.67 | 3.21 | 3.82 | 4.14 | 3.70 | |
Based on: 10-K (reporting date: 2026-02-01), 10-K (reporting date: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31).
1 2026 Calculation
Equity turnover = Net sales ÷ Stockholders’ equity (deficit)
= 164,683 ÷ 12,813 = 12.85
2 Click competitor name to see calculations.
The equity turnover ratio exhibits considerable fluctuation over the observed period. Initial values demonstrate a significant decrease followed by a substantial increase, and then a subsequent decline. This pattern suggests volatility in the relationship between net sales and stockholders’ equity.
- Equity Turnover Trend (2021-2026)
- In 2021, the equity turnover ratio stood at 40.05. A value is missing for 2022, interrupting the observed trend. The ratio then increased dramatically to 100.77 in 2023, indicating a more efficient utilization of equity to generate sales. This increase continued into 2024, reaching a peak of 146.23. However, a marked decrease is observed in 2025, with the ratio falling to 24.02. This downward trend persists into 2026, where the ratio settles at 12.85.
The substantial increase in the ratio from 2023 to 2024 suggests improved efficiency in converting equity financing into sales. Conversely, the decline from 2024 to 2026 indicates a reduced efficiency, potentially due to increased equity or decreased sales. The large fluctuation in stockholders’ equity, moving from a deficit in 2022 to a substantial positive value in 2026, likely contributes to the observed volatility in the equity turnover ratio.
- Relationship to Net Sales
- Net sales generally increased over the period, moving from US$132,110 million in 2021 to US$164,683 million in 2026. However, the equity turnover ratio did not consistently reflect this sales growth. The peak ratio in 2024 occurred despite a slight decrease in net sales compared to 2023, suggesting that changes in equity had a more significant impact on the ratio than changes in sales during that period.
The significant changes in the equity turnover ratio warrant further investigation to understand the underlying drivers. Factors such as share repurchases, dividend payments, and retained earnings could explain the fluctuations in stockholders’ equity and, consequently, the observed trends in the ratio.
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