Home Depot Inc. (NYSE:HD)

Current Income Tax Expense

The current income tax expense shows an overall increasing trend from February 2, 2020, to January 30, 2022, rising from $3,282 million to $5,558 million. However, after this peak in early 2022, a declining pattern emerges. The expense decreases steadily over the subsequent years, falling to $4,639 million by February 2, 2025. This shift indicates a reduction in the recognized current tax obligation after a period of growth.

Deferred Income Tax Expense

The deferred income tax expense exhibits greater volatility and less consistency compared to the current tax expense. Initially, it increased slightly from $191 million in early 2020 but then dropped sharply to negative values in the years following. For the majority of the periods, deferred taxes are recorded as negative, indicating deferred tax benefits or reductions in tax liabilities. There are brief recoveries, such as the positive $138 million noted in January 29, 2023, but the figure returns to negative territory afterward, finishing at a relatively small negative amount of $39 million in February 2025.

Provision for Income Taxes

The overall provision for income taxes loosely mirrors the trends of both current and deferred tax expenses but is dominated by the magnitude of the current tax. This provision rises significantly from $3,473 million in early 2020 to a peak of $5,372 million in January 2023. After this peak, the total provision decreases steadily to $4,600 million by February 2025. The fluctuations in deferred tax expenses contribute to small adjustments in the total provision but do not alter the primary trend driven by current taxes.

Summary

The data reflects a period of rising current income tax expenses until early 2022 followed by a decreasing trend through 2025. Deferred tax expenses fluctuate considerably, moving from positive to negative values, suggesting changes in deferred tax asset and liability recognition affecting reported tax expenses variably over the years. The combined effect results in an overall income tax provision that peaks in early 2023 before gradually declining. This pattern may be reflective of changes in taxable income, tax planning strategies, or tax law impacts during the observed periods.

The financial data reveals consistent statutory and effective tax rates over the six-year period analyzed. The federal statutory tax rate remains stable at 21% throughout all years, indicating no changes in federal tax obligations at the statutory level.

Observing the combined federal, state, and foreign effective tax rate, there is a slight fluctuation over time, with values ranging between 23.6% and 24.4%. The effective tax rate increased marginally from 23.6% in 2020 to a peak of 24.4% in 2022, followed by a gradual decline to 23.7% by 2025. These minor variations suggest modest changes in either the company's geographic profit mix, state tax rates, or foreign tax expenses, impacting the overall effective tax burden.

Federal statutory tax rate

Stable at 21% across all periods, indicating no statutory federal tax rate changes.

Combined effective tax rate

Fluctuated slightly between 23.6% and 24.4%, with a peak in 2022 followed by a gradual decrease through 2025.

Deferred Compensation

Deferred compensation shows a fluctuating pattern over the analyzed period, increasing sharply from 169 million USD in early 2020 to 472 million USD in early 2021, then stabilizing around the 230–240 million USD range in the most recent years.

Accrued Self-Insurance Liabilities

This liability remains relatively stable, ranging between 258 and 291 million USD, with no significant upward or downward trend observed.

State Income Taxes

State income taxes increased steadily from 100 million USD in 2020 to a peak of 209 million USD in early 2024, followed by a notable decrease to 133 million USD in 2025.

Merchandise Inventories

Merchandise inventories exhibit variability with missing data points. Available data show a notable increase to 110 million USD in early 2024, suggesting a potential inventory build-up during that period.

Non-Deductible Reserves

Non-deductible reserves show a consistent and sharp upward trend, more than tripling from 156 million USD in 2020 to 475 million USD in 2025.

Net Operating Losses

Net operating losses experienced growth from 70 million USD in 2020 to a peak of 150 million USD in early 2022, followed by a decline to 92 million USD by 2025, indicating possible improvement in operating performance or utilization of losses.

Lease Liabilities

Lease liabilities demonstrate a continuous and strong upward trajectory, rising from 1,536 million USD in 2020 to 2,255 million USD in 2025, reflecting increased leasing obligations.

Deferred Revenue

Deferred revenue shows consistent growth from 51 million USD in 2021 to 259 million USD in 2025, indicating higher advance payments or prepayments from customers.

Other Current Items

The "Other" category fluctuates without a clear trend, with values ranging from 46 to 135 million USD, showing a peak early in the period and partial recovery later.

Deferred Tax Assets

Gross deferred tax assets increased steadily from 2,451 million USD in 2020 to 3,792 million USD in 2025, suggesting growing temporary deductible differences or carryforwards.

Valuation Allowance

Valuation allowance mostly remains negative with minor fluctuations, peaking in negative valuation at -67 million USD in early 2024, which signals a conservative adjustment against deferred tax assets that slightly reverses the net asset growth.

Net Deferred Tax Assets (Net of Valuation Allowance)

The net deferred tax assets generally trend upward, increasing from 2,451 million USD in 2020 to 3,788 million USD in 2025, implying a strengthening of deferred tax benefits after allowances.

Negative Merchandise Inventories

Merchandise inventories show negative values in certain years, possibly reflecting adjustments or provisions; these values range modestly and do not show a clear directional trend.

Property and Equipment

Property and equipment balances are negative and slightly decreasing in magnitude from -1,107 million USD in 2020 to -854 million USD in 2025, possibly reflecting depreciation or asset disposals.

Goodwill and Other Intangibles

Goodwill and intangibles display a significant increase in negative value, deepening from -195 million USD in 2020 to -2,200 million USD in 2025, possibly indicating impairment charges or larger amortization expenses.

Lease Right-of-Use Assets

The lease right-of-use assets mirror the lease liabilities trend, increasing steadily from -1,458 million USD in 2020 to -2,178 million USD in 2025, consistent with expanded leasing arrangements.

Tax on Unremitted Earnings

This liability shows a decreasing trend in negative amounts, moving from -119 million USD in 2021 to -54 million USD in 2025, indicating a reduction in tax exposure related to foreign earnings.

Other Liabilities

The "Other" liabilities category is negative and fluctuates, ranging from -232 million USD in 2020 to -183 million USD in 2025, with some volatility over the period.

Deferred Tax Liabilities

Deferred tax liabilities have increased significantly in magnitude, from -3,018 million USD in 2020 to -5,481 million USD in 2025, indicating growing taxable temporary differences.

Net Deferred Tax Position

The net deferred tax assets (liabilities) balance remains negative throughout, showing variability but an overall deepening negative position, from -567 million USD in 2020 to -1,693 million USD in 2025, which may reflect changes in tax positions or asset/liability balances.

Deferred Tax Assets

Deferred tax assets exhibited a general increasing trend from February 2020 to January 2022, rising from 139 million US dollars to a peak of 344 million US dollars. After this peak, the values slightly declined, fluctuating around the low 300s range from January 2023 to January 2024, and then further decreased to 269 million US dollars by February 2025.

Deferred Tax Liabilities

Deferred tax liabilities showed a marked increase over the observed period. Starting at 706 million US dollars in February 2020, they rose sharply to 1,131 million in January 2021. Although there was a decrease to 909 million in January 2022, the liabilities then increased again, reaching 1,019 million in January 2023, followed by a slight decline to 863 million in January 2024, and a significant jump to 1,962 million US dollars by February 2025.

Overall Analysis

The deferred tax liabilities grew at a much higher and more volatile rate compared to the deferred tax assets throughout the entire period, with a particularly notable surge by the last recorded date. The deferred tax assets rose initially but showed a declining trend after 2022. This divergence suggests an increasing net deferred tax liability position, which may imply changes in future taxable income expectations, tax strategy, or timing differences in recognition of taxable amounts.

Total Assets

The reported total assets demonstrate a generally increasing trend over the six-year period, rising from $51,236 million in 2020 to $96,119 million in 2025. Adjusted total assets follow a similar pattern, slightly lower in value but showing consistent growth, increasing from $51,097 million to $95,850 million. This steady increase suggests expansion or accumulation of assets over time, with a notable acceleration between 2024 and 2025.

Total Liabilities

Reported total liabilities fluctuate but overall show an upward trajectory, increasing from $54,352 million in 2020 to $89,479 million in 2025. Adjusted total liabilities are consistently lower than reported liabilities, yet they also increase over the period from $53,646 million to $87,517 million. The narrowing gap between liabilities and assets in the latter years indicates a possible improvement in financial structure or asset management, although liabilities remain substantial.

Stockholders’ Equity (Deficit)

Reported stockholders’ equity exhibits volatility with negative and positive values across the years. Starting at a deficit of $3,116 million in 2020, equity improves to a surplus of $3,299 million in 2021, followed by alternating deficits and surpluses before reaching $6,640 million in 2025. Adjusted stockholders’ equity mirrors this pattern but with less negative values and a steady general improvement from a deficit of $2,549 million in 2020 to a positive $8,333 million in 2025. This trend indicates increasing shareholder value or retained earnings over time after adjustments.

Net Earnings

Reported net earnings show growth from $11,242 million in 2020 to a peak of $17,105 million in 2023, followed by a decline in the final two years to $14,806 million in 2025. Adjusted net earnings display a similar pattern, increasing to $17,243 million in 2023 before decreasing to $14,767 million in 2025. The initial rise reflects improving operational performance or profitability, while the subsequent fall may warrant further analysis to identify underlying factors such as market conditions or cost changes.

General Observations

The adjusted figures consistently present slightly more favorable financial positions, with lower liabilities and deficits and somewhat lower net earnings compared to reported figures. The persistent growth in assets and equity, alongside rising liabilities, suggests expansion financed by both debt and equity. The profitability peak around 2023 followed by a decrease may indicate cyclical influences or transitional phases in the business cycle. Overall, the financial structure appears to strengthen toward 2025, with equity turning more positive and asset growth outpacing liability increases on an adjusted basis.

The analysis of the financial data reveals several key trends and variations over the periods presented.

Net Profit Margin

Both reported and adjusted net profit margins exhibit a fluctuating pattern. The reported net profit margin starts at 10.2% in 2020, declines slightly through 2021, peaks in 2022 and 2023 at 10.87%, then declines to 9.28% by 2025. The adjusted net profit margin follows a similar trajectory but generally remains marginally lower than the reported figures in most periods. The peak adjusted margin is in 2023 at 10.95%, followed by a decline to 9.26% in 2025.

Total Asset Turnover

The reported and adjusted total asset turnover ratios closely mirror each other, indicating consistent adjustments. Initial values around 2.15-2.16 in 2020 decrease to lows near 1.66 by 2025, showing a gradual deterioration in asset efficiency. Minor fluctuations occur, such as a modest recovery in 2022 and 2023, but the overall trend toward decreasing turnover is clear, suggesting reduced efficiency in generating sales from assets over time.

Financial Leverage

Financial leverage shows notable volatility and unusually high values in several years. Adjusted financial leverage starts at 17.04 in 2021, increases dramatically to 33.65 in 2023, peaks at 47.81 in 2024, then substantially decreases to 11.5 in 2025. Reported leverage follows a similar but even more pronounced pattern, with extreme figures such as 48.94 in 2023 and 73.3 in 2024 before falling to 14.48 in 2025. These swings suggest large changes in the company's capital structure or accounting treatments affecting leverage metrics.

Return on Equity (ROE)

ROE values display extremely high and volatile figures, particularly in 2023 and 2024. Reported ROE jumps from missing or unknown values to 1095.07% in 2023, rising further to 1450.48% in 2024, then falling sharply to 222.98% in 2025. Adjusted ROE follows a similar pattern, but with lower peaks: 762.29% in 2023 and 935.57% in 2024, decreasing to 177.21% by 2025. These extraordinary values likely reflect the impact of high financial leverage combined with profit levels, indicating substantial magnification of equity returns but also heightened risk.

Return on Assets (ROA)

ROA remains relatively more stable and moderate compared to ROE but follows a downward trend over the periods. Reported ROA starts at 21.94% in 2020, decreases to 15.4% by 2025, with slight fluctuations in intermediate years. Adjusted ROA closely mirrors this pattern, illustrating consistent underlying asset profitability even after tax-related modifications. The declining ROA suggests a reduction in overall asset efficiency or profitability during the observed timeframe.

Overall, the data indicate a general decline in asset efficiency and profitability, alongside substantial increases and subsequent decreases in financial leverage and equity returns. The exceptional volatility in leverage and ROE suggests significant changes in the capital structure and risk profile over time. The deviations between reported and adjusted figures are relatively small for most measures except leverage and ROE, where adjustments reduce the reported extremities but do not eliminate the underlying trend.

Reported Net Earnings

The reported net earnings demonstrate a general upward trend from 11,242 million USD in February 2020 to a peak of 17,105 million USD in January 2023. Subsequently, there is a noticeable decline to 15,143 million USD in January 2024, followed by a slight decrease to 14,806 million USD in February 2025. This suggests a period of strong growth until early 2023, with earnings tapering off thereafter.

Adjusted Net Earnings

The adjusted net earnings follow a similar pattern to the reported net earnings, rising from 11,433 million USD in February 2020 to a high of 17,243 million USD in January 2023. Thereafter, adjusted earnings also experience a decline, dropping to 14,913 million USD in January 2024 and 14,767 million USD in February 2025. The close alignment between reported and adjusted figures indicates that tax adjustments have a consistent impact on net earnings over the observed periods.

Reported Net Profit Margin

The reported net profit margin remains relatively stable over the six-year period, starting at 10.2% in February 2020 and maintaining levels near 10.87% during 2022 and 2023. However, a decline is evident beginning in January 2024, where the margin falls to 9.92%, and further decreases to 9.28% by February 2025. This trend signals a reduction in profitability relative to revenue in the most recent years.

Adjusted Net Profit Margin

The adjusted net profit margin closely parallels the reported margin, starting at 10.37% in February 2020 and peaking at 10.95% in January 2023. Thereafter, a decline occurs, with margins dropping to 9.77% in January 2024 and slightly further to 9.26% in February 2025. This pattern reinforces the observation of reduced profitability margins following a period of stability and growth.

Overall Insights

Both reported and adjusted earnings show strong growth through early 2023, followed by a decline in the subsequent two years. Similarly, profit margins maintain a consistent high level until 2023 before experiencing a noteworthy downward shift in 2024 and 2025. The close alignment of reported and adjusted figures suggests that deferred tax adjustments do not significantly distort earnings trends. The recent decline in both earnings and margins may reflect increased costs, market pressures, or other operational challenges impacting profitability.

The financial data reveals certain distinct trends over the six-year period. Both reported and adjusted total assets have shown a general upward trajectory. Reported total assets increased from 51,236 million US dollars in 2020 to 96,119 million US dollars in 2025. Similarly, adjusted total assets mirrored this trend, rising from 51,097 million US dollars to 95,850 million US dollars. This substantial growth indicates a consistent expansion of asset base over the years.

Regarding asset turnover ratios, there is a noticeable decline over the same period. The reported total asset turnover decreased from 2.15 in 2020 to 1.66 in 2025, and the adjusted total asset turnover followed a similar pattern, moving from 2.16 to 1.66. This decline suggests that despite the increase in total assets, the efficiency in generating sales from these assets has diminished somewhat over time.

Total Assets

Both reported and adjusted figures indicate significant growth, approximately near doubling, which points to possible expansion, acquisition, or increased capital investment strategies.

Total Asset Turnover

The downward trend in turnover ratios implies reduced asset productivity. This trend might reflect challenges in maintaining sales growth proportional to asset growth or changes in asset composition that impact efficiency.

Relationship Between Assets and Turnover

The simultaneous increase in total assets and decrease in asset turnover suggests that asset growth outpaced sales growth. This dynamic could warrant further investigation to assess operational efficiency and asset utilization strategies.

Total Assets

The reported total assets showed a consistent upward trend from 51,236 million US dollars in early 2020 to 96,119 million US dollars by the beginning of 2025. The adjusted total assets mirrored this pattern closely, increasing from 51,097 million to 95,850 million US dollars over the same period. This growth indicates a steady expansion in the company's asset base.

Stockholders’ Equity (Deficit)

The reported stockholders’ equity exhibited significant volatility. It started with a deficit of -3,116 million US dollars in early 2020, turned positive in 2021 at 3,299 million US dollars, and then fluctuated in subsequent years, falling back into deficit in 2022 (-1,696 million) before returning to positive territory through 2023 to 2025, ending at 6,640 million US dollars in early 2025. The adjusted stockholders’ equity followed a similar fluctuating trend but showed less negative extremes, with values moving from -2,549 million US dollars in 2020 to a positive 8,333 million by 2025. This pattern reflects improved equity position when adjustments for income tax effects are taken into account.

Financial Leverage

The reported financial leverage ratio data is incomplete but where available indicates high variability. It rose sharply from 21.39 (date unspecified) to a peak of 73.3 at early 2024, then declined substantially to 14.48 by 2025. The adjusted financial leverage ratio, which considers deferred taxes, exhibited a similar but consistently lower trend, increasing from 17.04 to 47.81 and then declining to 11.5. These trends suggest fluctuations in the company’s reliance on debt relative to equity, with a notable deleveraging in the most recent period reported.

Summary Insights

The overall asset growth suggests a scaling of operations or asset acquisitions. The equity movements, especially when considering tax adjustments, point to fluctuations in retained earnings or other equity components that were likely influenced by tax-related accounting treatments. The leverage data reveals periods of elevated financial risk followed by a marked reduction in leverage, which might indicate strategic balance sheet management or changes in capital structure policy. Adjusted measures consistently show a more favorable financial position compared to reported figures, highlighting the impact of income tax adjustments on financial stability indicators.

The financial data reveals several notable trends over the examined periods. Reported net earnings generally increased from 11,242 million USD in 2020 to a peak of 17,105 million USD in 2023, followed by a decline to 14,806 million USD in 2025. Adjusted net earnings exhibit a similar pattern, rising from 11,433 million USD in 2020 to 17,243 million USD in 2023, then decreasing to 14,767 million USD in 2025. This indicates strong earnings growth up to 2023 with a subsequent moderation in profitability.

Reported stockholders’ equity shows significant volatility, starting with a deficit of 3,116 million USD in 2020 but turning positive at 3,299 million USD in 2021, followed by fluctuations including negative figures and ending with a marked increase to 6,640 million USD in 2025. Adjusted stockholders’ equity follows a comparable pattern, moving from a deficit of 2,549 million USD in 2020 to a positive 4,125 million USD in 2021, declining again, and concluding at a higher 8,333 million USD in 2025. These fluctuations suggest underlying adjustments significantly affect the equity position, with a positive trend towards the end of the period.

The reported Return on Equity (ROE) displays notable irregularities, with some values missing, but from 2023 onwards, it is considerably high: 1,095.07% in 2023, 1,450.48% in 2024, and 222.98% in 2025. Adjusted ROE is consistently lower yet shows a similar trajectory, increasing from 297.19% in 2021 to a peak of 935.57% in 2024 before falling to 177.21% in 2025. These extraordinarily high ROE figures likely reflect the low or fluctuating equity base rather than sustained operational performance, indicating that net earnings relative to equity have been unusually high due to the equity volatility.

Overall, the data depict a period of increasing profitability up to 2023 with earnings declining slightly afterward. Equity has been volatile but shows improvement in the last reported period, while ROE figures appear distorted by the fluctuating equity base. Adjustments to earnings and equity consistently moderate the headline figures but follow the same general trends, highlighting the importance of considering both reported and adjusted data for a comprehensive understanding.

The financial data reveals several notable trends over the observed periods. Net earnings, both reported and adjusted, show an overall upward trend from 2020 through 2023, peaking in the fiscal year ending January 29, 2023. Specifically, reported net earnings increased from 11,242 million USD in 2020 to a high of 17,105 million USD in 2023, followed by a decline in the subsequent years to 15,143 million USD in 2024 and 14,806 million USD in 2025. Adjusted net earnings follow a similar pattern, rising steadily to 17,243 million USD in 2023 and then decreasing to 14,913 million USD and 14,767 million USD in 2024 and 2025, respectively. This pattern suggests a period of growth culminating in 2023, followed by a contraction over the next two years.

Total assets, both reported and adjusted, exhibit consistent growth throughout the entire time span. Reported total assets increased substantially from 51,236 million USD in 2020 to 96,119 million USD in 2025. Adjusted total assets mirror this growth pattern closely, moving from 51,097 million USD to 95,850 million USD over the same period. This steady asset base expansion indicates ongoing investment and asset acquisition activities.

The return on assets (ROA) reflects the profitability relative to the asset base and shows a distinctive trend. Reported ROA decreased from 21.94% in 2020 to 18.23% in 2021 before climbing to 22.86% in 2022 and remaining relatively high at 22.38% in 2023. However, it then declined noticeably to 19.79% in 2024 and further to 15.40% in 2025. Adjusted ROA follows a similar trajectory, starting at 22.38% and reaching a peak around 22.65% in 2023 before decreasing to approximately 15.41% in 2025. This pattern indicates that despite asset growth, profitability relative to assets has decreased significantly in the last two years, suggesting either margin compression or increased asset base not yet translating into proportional earnings.

Net Earnings Trends

Consistently rising until early 2023, followed by a notable decrease in 2024 and 2025, both on reported and adjusted bases.

Total Assets Growth

Steady and considerable expansion over the entire period, indicating continuous investment in assets.

Return on Assets Variation

Initial decline, followed by a peak period, then a marked decrease after 2023, suggesting diminishing efficiency in utilizing assets to generate earnings.