Stock Analysis on Net

Home Depot Inc. (NYSE:HD)

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

Home Depot Inc., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Feb 2, 2025 Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020
Federal 3,417 3,764 3,918 4,066 3,462 2,370
State 836 882 880 981 928 572
Foreign 386 365 436 511 329 340
Current 4,639 5,011 5,234 5,558 4,719 3,282
Federal (67) (228) 102 (155) (404) 259
State 25 12 61 (11) (209) (72)
Foreign 3 (14) (25) (88) 6 4
Deferred (39) (230) 138 (254) (607) 191
Provision for income taxes 4,600 4,781 5,372 5,304 4,112 3,473

Based on: 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), 10-K (reporting date: 2020-02-02).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Home Depot Inc. current decreased from 2023 to 2024 and from 2024 to 2025.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Home Depot Inc. deferred decreased from 2023 to 2024 but then increased from 2024 to 2025 not reaching 2023 level.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Home Depot Inc. provision for income taxes decreased from 2023 to 2024 and from 2024 to 2025.

Effective Income Tax Rate (EITR)

Home Depot Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel
Feb 2, 2025 Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020
Federal statutory tax rate 21.00% 21.00% 21.00% 21.00% 21.00% 21.00%
Combined federal, state, and foreign effective tax rate 23.70% 24.00% 23.90% 24.40% 24.20% 23.60%

Based on: 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), 10-K (reporting date: 2020-02-02).

Item Description The company
Combined federal, state, and foreign effective tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Home Depot Inc. combined federal, state, and foreign effective tax rate increased from 2023 to 2024 but then decreased significantly from 2024 to 2025.

Components of Deferred Tax Assets and Liabilities

Home Depot Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Feb 2, 2025 Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020
Deferred compensation 230 237 236 471 472 169
Accrued self-insurance liabilities 271 258 276 272 291 285
State income taxes 133 209 149 138 117 100
Merchandise inventories 110 30 41
Non-deductible reserves 475 474 318 250 199 156
Net operating losses 92 99 115 150 144 70
Lease liabilities 2,255 2,034 1,879 1,528 1,605 1,536
Deferred revenue 259 191 148 121 51
Other 77 46 56 67 104 135
Deferred tax assets 3,792 3,658 3,207 2,997 3,024 2,451
Valuation allowance (4) (67) (5) (10) (8)
Deferred tax assets, net of valuation allowance 3,788 3,591 3,202 2,987 3,016 2,451
Merchandise inventories (12) (14) (26)
Property and equipment (854) (988) (992) (902) (1,061) (1,107)
Goodwill and other intangibles (2,200) (1,000) (953) (985) (1,030) (195)
Lease right-of-use assets (2,178) (1,956) (1,799) (1,473) (1,555) (1,458)
Tax on unremitted earnings (54) (53) (63) (74) (119)
Other (183) (144) (95) (104) (77) (232)
Deferred tax liabilities (5,481) (4,141) (3,902) (3,552) (3,842) (3,018)
Net deferred tax assets (liabilities) (1,693) (550) (700) (565) (826) (567)

Based on: 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), 10-K (reporting date: 2020-02-02).

Item Description The company
Deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Home Depot Inc. deferred tax assets increased from 2023 to 2024 and from 2024 to 2025.
Deferred tax assets, net of valuation allowance Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Home Depot Inc. deferred tax assets, net of valuation allowance increased from 2023 to 2024 and from 2024 to 2025.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Home Depot Inc. net deferred tax assets (liabilities) increased from 2023 to 2024 but then decreased significantly from 2024 to 2025.

Deferred Tax Assets and Liabilities, Classification

Home Depot Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Feb 2, 2025 Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020
Deferred tax assets (included in Other assets) 269 313 319 344 305 139
Deferred tax liabilities 1,962 863 1,019 909 1,131 706

Based on: 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), 10-K (reporting date: 2020-02-02).

Item Description The company
Deferred tax assets (included in Other assets) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Home Depot Inc. deferred tax assets (included in Other assets) decreased from 2023 to 2024 and from 2024 to 2025.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Home Depot Inc. deferred tax liabilities decreased from 2023 to 2024 but then increased from 2024 to 2025 exceeding 2023 level.

Adjustments to Financial Statements: Removal of Deferred Taxes

Home Depot Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Feb 2, 2025 Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020
Adjustment to Total Assets
Total assets (as reported) 96,119 76,530 76,445 71,876 70,581 51,236
Less: Noncurrent deferred tax assets, net 269 313 319 344 305 139
Total assets (adjusted) 95,850 76,217 76,126 71,532 70,276 51,097
Adjustment to Total Liabilities
Total liabilities (as reported) 89,479 75,486 74,883 73,572 67,282 54,352
Less: Noncurrent deferred tax liabilities, net 1,962 863 1,019 909 1,131 706
Total liabilities (adjusted) 87,517 74,623 73,864 72,663 66,151 53,646
Adjustment to Stockholders’ Equity (deficit)
Stockholders’ equity (deficit) (as reported) 6,640 1,044 1,562 (1,696) 3,299 (3,116)
Less: Net deferred tax assets (liabilities) (1,693) (550) (700) (565) (826) (567)
Stockholders’ equity (deficit) (adjusted) 8,333 1,594 2,262 (1,131) 4,125 (2,549)
Adjustment to Net Earnings
Net earnings (as reported) 14,806 15,143 17,105 16,433 12,866 11,242
Add: Deferred income tax expense (benefit) (39) (230) 138 (254) (607) 191
Net earnings (adjusted) 14,767 14,913 17,243 16,179 12,259 11,433

Based on: 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), 10-K (reporting date: 2020-02-02).


Home Depot Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Home Depot Inc., adjusted financial ratios

Microsoft Excel
Feb 2, 2025 Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020
Net Profit Margin
Reported net profit margin 9.28% 9.92% 10.87% 10.87% 9.74% 10.20%
Adjusted net profit margin 9.26% 9.77% 10.95% 10.70% 9.28% 10.37%
Total Asset Turnover
Reported total asset turnover 1.66 1.99 2.06 2.10 1.87 2.15
Adjusted total asset turnover 1.66 2.00 2.07 2.11 1.88 2.16
Financial Leverage
Reported financial leverage 14.48 73.30 48.94 21.39
Adjusted financial leverage 11.50 47.81 33.65 17.04
Return on Equity (ROE)
Reported ROE 222.98% 1,450.48% 1,095.07% 390.00%
Adjusted ROE 177.21% 935.57% 762.29% 297.19%
Return on Assets (ROA)
Reported ROA 15.40% 19.79% 22.38% 22.86% 18.23% 21.94%
Adjusted ROA 15.41% 19.57% 22.65% 22.62% 17.44% 22.38%

Based on: 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), 10-K (reporting date: 2020-02-02).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Home Depot Inc. adjusted net profit margin ratio deteriorated from 2023 to 2024 and from 2024 to 2025.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Home Depot Inc. adjusted total asset turnover ratio deteriorated from 2023 to 2024 and from 2024 to 2025.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Home Depot Inc. adjusted financial leverage ratio increased from 2023 to 2024 but then decreased significantly from 2024 to 2025.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Home Depot Inc. adjusted ROE improved from 2023 to 2024 but then deteriorated significantly from 2024 to 2025.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Home Depot Inc. adjusted ROA deteriorated from 2023 to 2024 and from 2024 to 2025.

Home Depot Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

Microsoft Excel
Feb 2, 2025 Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020
As Reported
Selected Financial Data (US$ in millions)
Net earnings 14,806 15,143 17,105 16,433 12,866 11,242
Net sales 159,514 152,669 157,403 151,157 132,110 110,225
Profitability Ratio
Net profit margin1 9.28% 9.92% 10.87% 10.87% 9.74% 10.20%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings 14,767 14,913 17,243 16,179 12,259 11,433
Net sales 159,514 152,669 157,403 151,157 132,110 110,225
Profitability Ratio
Adjusted net profit margin2 9.26% 9.77% 10.95% 10.70% 9.28% 10.37%

Based on: 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), 10-K (reporting date: 2020-02-02).

2025 Calculations

1 Net profit margin = 100 × Net earnings ÷ Net sales
= 100 × 14,806 ÷ 159,514 = 9.28%

2 Adjusted net profit margin = 100 × Adjusted net earnings ÷ Net sales
= 100 × 14,767 ÷ 159,514 = 9.26%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Home Depot Inc. adjusted net profit margin ratio deteriorated from 2023 to 2024 and from 2024 to 2025.

Adjusted Total Asset Turnover

Microsoft Excel
Feb 2, 2025 Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020
As Reported
Selected Financial Data (US$ in millions)
Net sales 159,514 152,669 157,403 151,157 132,110 110,225
Total assets 96,119 76,530 76,445 71,876 70,581 51,236
Activity Ratio
Total asset turnover1 1.66 1.99 2.06 2.10 1.87 2.15
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net sales 159,514 152,669 157,403 151,157 132,110 110,225
Adjusted total assets 95,850 76,217 76,126 71,532 70,276 51,097
Activity Ratio
Adjusted total asset turnover2 1.66 2.00 2.07 2.11 1.88 2.16

Based on: 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), 10-K (reporting date: 2020-02-02).

2025 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 159,514 ÷ 96,119 = 1.66

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 159,514 ÷ 95,850 = 1.66

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Home Depot Inc. adjusted total asset turnover ratio deteriorated from 2023 to 2024 and from 2024 to 2025.

Adjusted Financial Leverage

Microsoft Excel
Feb 2, 2025 Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020
As Reported
Selected Financial Data (US$ in millions)
Total assets 96,119 76,530 76,445 71,876 70,581 51,236
Stockholders’ equity (deficit) 6,640 1,044 1,562 (1,696) 3,299 (3,116)
Solvency Ratio
Financial leverage1 14.48 73.30 48.94 21.39
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 95,850 76,217 76,126 71,532 70,276 51,097
Adjusted stockholders’ equity (deficit) 8,333 1,594 2,262 (1,131) 4,125 (2,549)
Solvency Ratio
Adjusted financial leverage2 11.50 47.81 33.65 17.04

Based on: 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), 10-K (reporting date: 2020-02-02).

2025 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity (deficit)
= 96,119 ÷ 6,640 = 14.48

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity (deficit)
= 95,850 ÷ 8,333 = 11.50

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Home Depot Inc. adjusted financial leverage ratio increased from 2023 to 2024 but then decreased significantly from 2024 to 2025.

Adjusted Return on Equity (ROE)

Microsoft Excel
Feb 2, 2025 Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020
As Reported
Selected Financial Data (US$ in millions)
Net earnings 14,806 15,143 17,105 16,433 12,866 11,242
Stockholders’ equity (deficit) 6,640 1,044 1,562 (1,696) 3,299 (3,116)
Profitability Ratio
ROE1 222.98% 1,450.48% 1,095.07% 390.00%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings 14,767 14,913 17,243 16,179 12,259 11,433
Adjusted stockholders’ equity (deficit) 8,333 1,594 2,262 (1,131) 4,125 (2,549)
Profitability Ratio
Adjusted ROE2 177.21% 935.57% 762.29% 297.19%

Based on: 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), 10-K (reporting date: 2020-02-02).

2025 Calculations

1 ROE = 100 × Net earnings ÷ Stockholders’ equity (deficit)
= 100 × 14,806 ÷ 6,640 = 222.98%

2 Adjusted ROE = 100 × Adjusted net earnings ÷ Adjusted stockholders’ equity (deficit)
= 100 × 14,767 ÷ 8,333 = 177.21%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Home Depot Inc. adjusted ROE improved from 2023 to 2024 but then deteriorated significantly from 2024 to 2025.

Adjusted Return on Assets (ROA)

Microsoft Excel
Feb 2, 2025 Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020
As Reported
Selected Financial Data (US$ in millions)
Net earnings 14,806 15,143 17,105 16,433 12,866 11,242
Total assets 96,119 76,530 76,445 71,876 70,581 51,236
Profitability Ratio
ROA1 15.40% 19.79% 22.38% 22.86% 18.23% 21.94%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings 14,767 14,913 17,243 16,179 12,259 11,433
Adjusted total assets 95,850 76,217 76,126 71,532 70,276 51,097
Profitability Ratio
Adjusted ROA2 15.41% 19.57% 22.65% 22.62% 17.44% 22.38%

Based on: 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), 10-K (reporting date: 2020-02-02).

2025 Calculations

1 ROA = 100 × Net earnings ÷ Total assets
= 100 × 14,806 ÷ 96,119 = 15.40%

2 Adjusted ROA = 100 × Adjusted net earnings ÷ Adjusted total assets
= 100 × 14,767 ÷ 95,850 = 15.41%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Home Depot Inc. adjusted ROA deteriorated from 2023 to 2024 and from 2024 to 2025.