An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

Adjustments to Financial Statements for Operating Leases
Adjusted Financial Ratios for Operating Leases (Summary)
Adjusted Total Asset Turnover
Adjusted Debt to Equity
Adjusted Return on Assets (ROA)

Home Depot Inc., adjustments to financial statements

US$ in millions

	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)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	—)	—)	—)	—)	—)
Total assets (adjusted)	96,119)	76,530)	76,445)	71,876)	70,581)	51,236)
Adjustment to Total Debt
Total debt (as reported)	53,383)	44,111)	43,193)	40,086)	37,238)	31,483)
Add: Operating lease liability (before adoption of FASB Topic 842)²	—)	—)	—)	—)	—)	—)
Add: Current operating lease liabilities	1,274)	1,050)	945)	830)	828)	828)
Add: Long-term operating lease liabilities	7,633)	7,082)	6,226)	5,353)	5,356)	5,066)
Total debt (adjusted)	62,290)	52,243)	50,364)	46,269)	43,422)	37,377)

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).

^{1, 2} Equal to total present value of future operating lease payments.

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

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Home Depot Inc., adjusted financial ratios

	Feb 2, 2025	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020
Total Asset Turnover¹
Reported total asset turnover	1.66	1.99	2.06	2.10	1.87	2.15
Adjusted total asset turnover	1.66	1.99	2.06	2.10	1.87	2.15
Debt to Equity²
Reported debt to equity	8.04	42.25	27.65	—	11.29	—
Adjusted debt to equity	9.38	50.04	32.24	—	13.16	—
Return on Assets³ (ROA)
Reported ROA	15.40%	19.79%	22.38%	22.86%	18.23%	21.94%
Adjusted ROA	15.40%	19.79%	22.38%	22.86%	18.23%	21.94%

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).

¹ See details »

² See details »

³ See details »

Financial 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 debt to equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Home Depot Inc. adjusted debt to equity ratio deteriorated from 2023 to 2024 but then improved from 2024 to 2025 exceeding 2023 level.
Adjusted ROA	A profitability ratio calculated as 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

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	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 Operating Leases
Selected Financial Data (US$ in millions)
Net sales	159,514)	152,669)	157,403)	151,157)	132,110)	110,225)
Adjusted total assets	96,119)	76,530)	76,445)	71,876)	70,581)	51,236)
Activity Ratio
Adjusted total asset turnover²	1.66	1.99	2.06	2.10	1.87	2.15

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 ÷ 96,119 = 1.66

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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.

	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 debt	53,383)	44,111)	43,193)	40,086)	37,238)	31,483)
Stockholders’ equity (deficit)	6,640)	1,044)	1,562)	(1,696)	3,299)	(3,116)
Solvency Ratio
Debt to equity¹	8.04	42.25	27.65	—	11.29	—
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt	62,290)	52,243)	50,364)	46,269)	43,422)	37,377)
Stockholders’ equity (deficit)	6,640)	1,044)	1,562)	(1,696)	3,299)	(3,116)
Solvency Ratio
Adjusted debt to equity²	9.38	50.04	32.24	—	13.16	—

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 Debt to equity = Total debt ÷ Stockholders’ equity (deficit)
= 53,383 ÷ 6,640 = 8.04

² Adjusted debt to equity = Adjusted total debt ÷ Stockholders’ equity (deficit)
= 62,290 ÷ 6,640 = 9.38

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Solvency ratio	Description	The company
Adjusted debt-to-equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Home Depot Inc. adjusted debt-to-equity ratio deteriorated from 2023 to 2024 but then improved from 2024 to 2025 exceeding 2023 level.

	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 Operating Leases
Selected Financial Data (US$ in millions)
Net earnings	14,806)	15,143)	17,105)	16,433)	12,866)	11,242)
Adjusted total assets	96,119)	76,530)	76,445)	71,876)	70,581)	51,236)
Profitability Ratio
Adjusted ROA²	15.40%	19.79%	22.38%	22.86%	18.23%	21.94%

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 × Net earnings ÷ Adjusted total assets
= 100 × 14,806 ÷ 96,119 = 15.40%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as 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. (NYSE:HD)

Analysis of Operating Leases

Adjustments to Financial Statements for Operating Leases

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

Adjusted Financial Ratios for Operating Leases (Summary)

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

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)