Lowe’s Cos. Inc. (NYSE:LOW)

The data presents several financial metrics over a six-year period, highlighting both operational performance and capital efficiency. Notable trends can be observed in net operating profit after taxes (NOPAT), cost of capital, invested capital, and economic profit.

Net Operating Profit After Taxes (NOPAT)

NOPAT showed a significant upward trend from 2020 to 2022, increasing from 5,097 million USD to a peak of 9,827 million USD in 2022. However, this was followed by a sharp decline in 2023 to 7,020 million USD. In the two subsequent years, 2024 and 2025, NOPAT partially recovered, reaching 8,789 million USD and then slightly declining to 8,137 million USD, respectively. This pattern suggests volatility in operational profitability, with a strong recovery phase after a notable dip.

Cost of Capital

The cost of capital exhibited an overall rising trend from 11.7% in 2020 to a peak of 13.81% in 2022. This was followed by minor fluctuations but remained relatively high, staying above 13% in the later years. This upward trend indicates increasing capital costs, which may reflect broader market conditions or company-specific risk changes, and poses a higher hurdle for generating value from invested capital.

Invested Capital

Invested capital fluctuated over the period, starting at 26,717 million USD in 2020, increasing slightly in 2021, and then decreasing progressively to 24,710 million USD in 2023. It rebounded moderately in 2024 and 2025, reaching 25,913 million USD and 26,276 million USD, respectively. This variation suggests strategic adjustments in asset deployment or capital management efforts to optimize returns amidst changing market or operational conditions.

Economic Profit

The economic profit followed a pattern somewhat similar to NOPAT but with more pronounced variability. It rose substantially from 1,972 million USD in 2020 to a high of 6,194 million USD in 2022, underscoring strong value creation in those years. A steep decline occurred in 2023 to 3,812 million USD, aligning with the drop in NOPAT and possibly influenced by higher capital costs or reduced operational efficiency. A recovery phase is evident again in 2024 and 2025, with economic profit reaching 5,313 million USD and then slightly declining to 4,653 million USD, indicating efforts to restore value creation despite capital cost pressures.

Net Earnings

The net earnings of the company demonstrated a significant upward trend from 2020 to 2022, rising from 4,281 million US dollars to 8,442 million US dollars. This almost doubled the net earnings within a two-year period, indicating robust profitability. However, in 2023, there was a noticeable decline to 6,437 million US dollars, followed by a partial recovery in 2024 to 7,726 million US dollars. The most recent data for 2025 shows a decrease again to 6,957 million US dollars, suggesting some volatility or challenges impacting net earnings in the latter period.

Net Operating Profit After Taxes (NOPAT)

The NOPAT figures align with the general trend observed in net earnings. Starting at 5,097 million US dollars in 2020, NOPAT increased steadily through 2021 and peaked at 9,827 million US dollars in 2022. This indicates improved operational efficiency and profitability. Following the peak, NOPAT decreased to 7,020 million US dollars in 2023, then rose again to 8,789 million US dollars in 2024, before declining to 8,137 million US dollars in 2025. Although the fluctuations in NOPAT mirror those in net earnings, the values still reflect a relatively strong operating performance over the years.

The data reflects the annual figures for income tax provision and cash operating taxes over a six-year period. Both financial items show a general upward trend from 2020 to 2023, followed by a noticeable decline in the later years.

Income Tax Provision

The income tax provision increased significantly from 1,342 million USD in 2020 to a peak of 2,766 million USD in 2022. After 2022, the provision declined steadily to 2,196 million USD by 2025. This pattern suggests a rise in taxable income or tax liabilities initially, followed by effective tax management or reduced taxable income in the later years.

Cash Operating Taxes

Cash operating taxes also exhibit consistent growth, increasing from 1,386 million USD in 2020 to a peak of 3,055 million USD in 2023. Post-2023, these taxes decreased to 2,501 million USD by 2025. This trend aligns closely with the income tax provision pattern, indicating cash tax payments followed similar dynamics, perhaps influenced by timing differences or changes in tax regulations.

Overall, the data shows strong growth in tax-related expenses through early years, peaking around 2022-2023, with subsequent reductions suggesting strategic tax planning, fluctuations in earnings, or changes in tax rules that impacted both provision and cash taxes similarly.

The financial data reveals several notable trends over the periods analyzed. One prominent pattern is the consistent increase in total reported debt and leases from 23,750 million US dollars in early 2020 to a peak of 40,145 million US dollars in early 2024, followed by a slight reduction to 39,678 million US dollars in early 2025. This indicates a significant rise in the company's leverage over the five-year period, particularly between 2021 and 2024.

Shareholders' equity shows a concerning downward trajectory, decreasing from 1,972 million US dollars in early 2020 to a negative value starting in 2022. The deficit deepens sharply from -4,816 million US dollars in early 2022 to a low point around -15,050 million US dollars in early 2024, with a minor improvement to -14,231 million US dollars in early 2025. This negative equity position suggests substantial accumulated losses or other equity-reducing events, which may impact the company’s financial stability and shareholder confidence.

Invested capital fluctuates throughout the period, starting at 26,717 million US dollars in early 2020 and peaking at 28,534 million US dollars in early 2021. Subsequently, it declines to a low of 24,710 million US dollars in early 2023 before gradually increasing again to 26,276 million US dollars by early 2025. These movements reflect variations in the company’s long-term investments and financing structure, possibly influenced by the changes in debt and equity.

Total Reported Debt & Leases

Shows a strong upward trend from 2020 through 2024, increasing by approximately 69%, followed by a slight decrease in 2025.

Shareholders’ Equity (Deficit)

Transitions from positive equity into a growing deficit starting in 2022, with the deficit nearly tripling by 2024 and remaining substantial in 2025.

Invested Capital

Peaks in 2021, declines through 2023, then recovers modestly by 2025, suggesting adjustments in capital investment and financing.

Overall, the company exhibits increasing financial leverage and deteriorating equity over the analyzed period, which may reflect operational challenges, increased borrowing, or sustained losses. The minor recovery in invested capital in the later periods could indicate attempts to stabilize or improve financial structure. Close attention to the relationship between debt levels and equity is warranted to assess ongoing financial health and risk exposure.

Economic Profit

The economic profit exhibits a fluctuating yet generally increasing trend over the observed periods. Beginning at $1,972 million in early 2020, it rises significantly to a peak of $6,194 million by early 2022. Following this peak, the economic profit declines to $3,812 million in early 2023 before partially recovering to $5,313 million in early 2024. However, it decreases again to $4,653 million in early 2025. This pattern suggests variability in profitability with notable volatility after the peak period.

Invested Capital

Invested capital shows a somewhat inconsistent trend with moderate fluctuations. Starting at $26,717 million in 2020, it increased slightly to $28,534 million in 2021, then decreased progressively to $24,710 million in 2023. Subsequently, it rose again to $25,913 million in 2024 and marginally increased to $26,276 million in 2025. Overall, although invested capital experienced decreases followed by partial recoveries, the span of values remained relatively close to the initial level by the end of the period.

Economic Spread Ratio

The economic spread ratio displays significant variability throughout the period. Initially recorded at 7.38% in 2020, it increased sharply to 23.56% in 2022, reflecting a substantial improvement in returns relative to invested capital. Afterward, it decreased to 15.43% in 2023, rebounded to 20.5% in 2024, and declined again to 17.71% in 2025. This pattern indicates that while the company experienced periods of high capital efficiency, these peaks were followed by notable contractions.

Overall Observations

The data indicates a period of strong profitability growth culminating in early 2022, followed by more variable outcomes in subsequent years. Despite fluctuations in invested capital, the company's ability to generate economic profit and maintain a healthy economic spread ratio suggests efficient capital utilization, albeit with evident cyclicality. The economic spread ratio's volatility points to changing external or internal factors affecting return efficiency, which should be monitored closely going forward.

The financial data indicates several noteworthy trends over the analyzed periods. The company's economic profit has demonstrated significant fluctuations, peaking at 6,194 million US dollars in January 2022 before declining to 4,653 million US dollars by January 2025. This volatility suggests varying levels of profitability and efficiency in generating value above the cost of capital during the intervals.

Adjusted net sales initially increased from 72,135 million US dollars in January 2020 to a high of 96,822 million US dollars in February 2023, indicating a period of growth in revenue. However, subsequent periods show a decline, with adjusted net sales decreasing to 83,667 million US dollars by January 2025. This downward trend in sales towards the most recent periods could signal challenges in the market or changes in demand.

The economic profit margin, reflecting the ratio of economic profit to adjusted net sales, exhibits variability aligned with the trends in both economic profit and net sales. It rose from 2.73% in January 2020 to a high of 6.41% in January 2022, suggesting improved profitability relative to sales during this timeframe. After a dip to 3.94% in February 2023, the margin increased again to 6.16% in February 2024 before slightly decreasing to 5.56% in January 2025.

Summary of Observations:

- Economic profit shows a peak followed by a decline, indicating fluctuating profitability.

- Adjusted net sales increased until early 2023 and then decreased, reflecting potential market challenges.

- Economic profit margin rose significantly until 2022, dipped, then partially recovered, mirroring the trends in economic profit and sales.

- The data suggests cycles of growth and contraction, necessitating analysis of external and internal factors impacting performance.