Lowe’s Cos. Inc. (NYSE:LOW)

The financial data reveals several key trends regarding the return on assets, financial leverage, and return on equity over the periods analyzed.

Return on Assets (ROA)

The ROA exhibits an overall upward trend with some fluctuations. Starting at 10.85% in early 2020, the ratio increased to 12.49% in early 2021. The figure peaked at 18.91% in early 2022, followed by a decline to 14.73% in early 2023. Subsequently, it rose again to 18.49% in early 2024, before slightly decreasing to 16.14% in early 2025. This pattern indicates a generally strong ability to generate profits from assets, albeit with some variability in returns.

Financial Leverage

Financial leverage experienced a substantial increase between 2020 and 2021, moving from a ratio of 20.02 to 32.52. Data for subsequent years is unavailable, preventing further trend analysis. The sharp increase in leverage by 2021 suggests a significant rise in the use of debt or other liabilities relative to equity to finance assets during that period.

Return on Equity (ROE)

The ROE displays an exceptionally high increase from 217.09% in early 2020 to 406.05% in early 2021. Data for the following periods is missing, making it impossible to comment on long-term trends. The extremely high ROE figures, particularly in conjunction with the increased financial leverage, may indicate high profitability driven by leverage but also suggest potential risk due to the significant use of debt.

In summary, the data points to strong profitability metrics as reflected in ROA and ROE, with a notable increase in financial leverage by 2021. Missing data for the financial leverage and ROE in later periods restricts the ability to fully assess ongoing trends. The fluctuations in ROA alongside the leverage data imply this company has engaged in varying levels of risk and operational efficiency across the reported years.

Net Profit Margin

The net profit margin exhibits an overall upward trend from 5.93% in early 2020 to 8.31% in early 2025. There is a notable increase reaching 8.77% in 2022, followed by a slight dip to 6.63% in 2023, and then a rebound to 8.94% in 2024. This indicates improved profitability over the period, with some volatility in the middle years.

Asset Turnover

Asset turnover shows an initial increase from 1.83 in 2020 to a peak of 2.22 in 2023, suggesting more efficient use of assets to generate sales. However, after 2023, the ratio declines to 1.94 in 2025, indicating a potential reduction in asset efficiency or a shift in asset composition.

Financial Leverage

Financial leverage is reported only for 2020 and 2021, with a substantial rise from 20.02 to 32.52. The absence of data after 2021 limits further analysis, but the increase in leverage indicates a significant rise in the use of debt or liabilities relative to equity during this period, which could affect financial risk.

Return on Equity (ROE)

ROE shows exceptionally high reported values in 2020 and 2021, increasing from 217.09% to 406.05%. These figures are unusually elevated, possibly reflecting extraordinary financial leverage or accounting effects. No data is available beyond 2021, restricting assessment of recent profitability from an equity perspective.

Tax Burden

The tax burden ratio remained relatively stable over the observed periods, fluctuating slightly between 0.71 and 0.76. This stability suggests consistent effective tax management, with a slight dip in 2023 before returning to previous levels in subsequent years.

Interest Burden

The interest burden ratio shows minor variation, moving from 0.89 in 2020 to a peak of 0.93 in 2022, followed by a gradual decrease to 0.86 by 2025. This indicates a slight improvement in managing interest expenses over time, reducing the impact of interest costs on earnings before tax.

EBIT Margin

The EBIT margin exhibited a generally positive trend during the period. Starting at 8.79% in 2020, it increased steadily to a high of 13.5% in 2024 before a slight decline to 12.7% in 2025. This implies enhanced operational efficiency and profitability, notwithstanding a small reduction in the most recent year.

Asset Turnover

The asset turnover ratio improved from 1.83 in 2020 to a peak of 2.22 in 2023, reflecting more efficient use of assets to generate sales. However, this metric declined to 1.94 by 2025, suggesting some reduction in asset efficiency in the later period examined.

Financial Leverage

Data on financial leverage is incomplete, with available figures indicating a substantial increase from 20.02 in 2020 to 32.52 in 2021. This significant rise points to greater reliance on debt financing, though the absence of later data limits comprehensive trend analysis.

Return on Equity (ROE)

The return on equity shows a dramatic increase from 217.09% in 2020 to 406.05% in 2021, highlighting exceptional profitability and effective equity utilization in that period. However, subsequent data is unavailable, preventing assessment of sustainability or trend continuation.

Net Profit Margin

The net profit margin exhibited an overall upward trajectory from 2020 through 2024, increasing from 5.93% in 2020 to a peak of 8.94% in 2024. This indicates improved profitability over this period, with a notable dip in 2023 to 6.63%, suggesting a temporary decline in profit efficiency. The margin slightly decreased to 8.31% in 2025 but remained significantly higher than the initial value in 2020.

Asset Turnover

The asset turnover ratio showed a gradual increase from 1.83 in 2020 to a peak of 2.22 in 2023, reflecting increased efficiency in using assets to generate revenue. However, in 2024 and 2025, the ratio declined to 2.07 and then further to 1.94, indicating a reduction in asset utilization efficiency after 2023 while still remaining above the 2020 baseline.

Return on Assets (ROA)

Return on assets demonstrated significant growth between 2020 and 2022, rising sharply from 10.85% to 18.91%, signaling enhanced overall profitability relative to assets. Despite a fall to 14.73% in 2023, there was a recovery to 18.49% in 2024. The figure decreased again to 16.14% in 2025, although maintaining a level well above the initial period. This pattern suggests fluctuating but generally strong asset profitability over the examined timeframe.

Summary of Trends

Across the analyzed period, the company showed improvements in profitability metrics, with net profit margin and return on assets generally trending upward despite some volatility. Asset turnover improved until 2023 but declined afterward, indicating potential shifts in operational efficiency or asset base management. The fluctuations in ROA and profit margin around 2023 may reflect external or internal factors impacting performance temporarily, followed by partial recovery. Overall, the data suggest growth in profitability and asset use efficiency with some recent moderation.

Tax Burden

The tax burden ratio remained relatively stable over the reported periods, fluctuating slightly between 0.71 and 0.76. There was a mild decline observed in the 2023 period followed by a return to previous levels in subsequent years, indicating consistent effective tax rates over time.

Interest Burden

The interest burden ratio showed a slow but steady improvement, decreasing from 0.89 in 2020 to 0.86 in 2025. This trend suggests a gradual reduction in interest expenses relative to earnings before interest and taxes, reflecting potentially enhanced financial cost management or favorable borrowing conditions.

EBIT Margin

The EBIT margin exhibited an upward trend with some volatility. Starting at 8.79% in 2020, it peaked at 13.5% in 2024 before slightly declining to 12.7% in 2025. This pattern indicates overall improved operational profitability, albeit with minor fluctuations likely due to changes in cost structures or revenue performance.

Asset Turnover

Asset turnover increased from 1.83 in 2020 to a peak of 2.22 in 2023, showing enhanced efficiency in using assets to generate sales. However, after 2023, it declined to 1.94 by 2025, suggesting a potential slowdown in asset utilization effectiveness or expansion in asset base not immediately matched by sales growth.

Return on Assets (ROA)

ROA rose significantly from 10.85% in 2020 to a high of 18.91% in 2022, followed by some fluctuations but remained above 16% in 2025. This reflects strong overall profitability and improved use of asset resources, driven by a combination of increased EBIT margins and asset turnover, despite minor variability in intermediate years.

Tax Burden

The tax burden ratio remained relatively stable between 2020 and 2025, fluctuating slightly around 0.75 to 0.76. A notable dip to 0.71 occurred in 2023, indicating a temporary reduction in tax expense relative to pre-tax earnings, but this ratio returned to previous levels in subsequent years.

Interest Burden

The interest burden ratio demonstrated a modest improvement over the observed period. Starting at 0.89 in 2020, the ratio increased to a peak of 0.93 in 2022, suggesting higher interest expenses that year. However, from 2022 onwards, there was a consistent decline to 0.86 by 2025, indicating reduced interest costs relative to earnings before interest and taxes.

EBIT Margin

The EBIT margin showed an overall positive trend with fluctuations. It rose from 8.79% in 2020 to a peak of 12.58% in 2022, reflecting improved operational profitability. A decline to 10.5% in 2023 was observed, but the margin increased again to 13.5% in 2024 before slightly decreasing to 12.7% in 2025. This pattern suggests some volatility but an overall enhancement in operating efficiency.

Net Profit Margin

The net profit margin followed a generally upward trajectory, increasing from 5.93% in 2020 to a high of 8.94% in 2024. A dip occurred in 2023, dropping to 6.63%, which aligns with the EBIT margin decrease that year. In 2025, the margin slightly decreased to 8.31%, remaining significantly above the 2020 level. This trend indicates improved profitability after all expenses, with some year-to-year variability.