Home Depot Inc. (NYSE:HD)

The financial data reveals notable trends in profitability, capital investment, and economic profit over the periods analyzed.

Net Operating Profit After Taxes (NOPAT)

NOPAT demonstrated an overall increasing trend from 12,860 million USD in February 2020, peaking at 18,170 million USD in January 2023. However, it subsequently declined to 16,384 million USD in January 2024 before slightly recovering to 16,730 million USD in February 2025. This pattern indicates a period of growth followed by a modest contraction and stabilization.

Cost of Capital

The cost of capital showed minor fluctuations within a narrow range, starting at 13.06% in February 2020 and rising marginally to 13.77% by January 2024 before declining slightly to 13.49% in February 2025. Overall, the cost of capital remained relatively stable, suggesting consistent market or operational risk perceptions during the period.

Invested Capital

Invested capital experienced substantial growth throughout the timeframe, increasing from 36,678 million USD in February 2020 to 72,841 million USD in February 2025. The increase was steady with a notable acceleration after January 2024, indicating significant additional investment or asset accumulation in the later periods.

Economic Profit

Economic profit, after an initial decrease from 8,072 million USD in February 2020 to 7,419 million USD in January 2021, rose sharply to 11,600 million USD in January 2022. It then declined gradually in the following years to reach 6,907 million USD by February 2025. This trend suggests that despite increasing invested capital, the generation of economic value above the cost of capital diminished in the latter periods.

In summary, the entity increased its invested capital significantly over the years, achieving higher NOPAT until early 2023. Despite stable cost of capital rates, economic profit declined after a peak in 2022, indicating that the incremental investments may have been less effective in generating value above the capital costs in the most recent years.

Net Earnings

Net earnings exhibit an overall upward trend from the initial value of 11,242 million US dollars in the period ending February 2, 2020, reaching a peak of 17,105 million US dollars by January 29, 2023. However, after this peak, there is a noticeable decline, with net earnings decreasing to 15,143 million US dollars in January 28, 2024, and further slightly declining to 14,806 million US dollars by February 2, 2025.

Net Operating Profit After Taxes (NOPAT)

NOPAT shows an increasing pattern from 12,860 million US dollars in the period ending February 2, 2020, to reach 18,170 million US dollars as of January 29, 2023. Following this peak, there is a decline in the subsequent period to 16,384 million US dollars in January 28, 2024. However, unlike net earnings, NOPAT recovers slightly in the most recent period, increasing to 16,730 million US dollars by February 2, 2025.

Comparative Insights

Both net earnings and NOPAT follow a similar trend characterized by growth up to the period ending early 2023, followed by a reduction. The decline in net earnings is more consistent in the last two periods, whereas NOPAT experiences a partial recovery in the final period. This divergence could indicate changes in operational efficiency or tax impacts that warrant further examination. Overall, the data suggests a phase of growth culminating around 2023, with some signs of financial pressure or transitional changes in profitability thereafter.

The financial data reveals the trends in provision for income taxes and cash operating taxes over six consecutive years.

Provision for Income Taxes

From February 2020 to January 2021, the provision for income taxes increased significantly from 3,473 million US dollars to 4,112 million, representing a notable rise. This upward trend continued into January 2022, peaking at 5,304 million US dollars. However, in the following years, the provision began to decline slightly: decreasing to 5,372 million in January 2023, then further reducing to 4,781 million in January 2024, and ending at 4,600 million in February 2025. Overall, after an initial sharp rise through 2022, the provision for income taxes demonstrated a downward adjustment over the last three years in the dataset.

Cash Operating Taxes

Cash operating taxes showed a strong upward movement from 3,573 million US dollars in February 2020 to 5,040 million in January 2021. This increase continued into January 2022 with another rise to 5,876 million. The following year, January 2023, registered a slight decrease to 5,622 million, which continued with marginal declines in subsequent years: 5,482 million in January 2024 and 5,201 million in February 2025. This pattern indicates that after reaching a peak in early 2022, cash operating taxes began to taper moderately but remained considerably higher than the initial 2020 values.

In summary, both provision for income taxes and cash operating taxes experienced significant growth from 2020 through early 2022, indicating increased tax-related expenses or obligations during this period. Post-2022, both metrics showed a gradual decline, potentially reflecting changes in taxable income, tax strategies, or regulatory impacts. The consistent higher levels from 2021 onwards compared to 2020 suggest an overall increase in tax burden or profitability subject to tax over the six-year span.

The financial data reveals several notable trends in the company’s capital structure and financial position over the observed periods.

Total reported debt & leases

This figure exhibits a consistent upward trend throughout the periods, increasing from $37,377 million in early 2020 to $62,290 million by early 2025. The rise indicates a growing reliance on debt and lease obligations, which increased by nearly 67% over the five-year span.

Stockholders’ equity (deficit)

Stockholders’ equity fluctuates significantly, starting with a negative position of -$3,116 million in early 2020 and improving to a positive $3,299 million by early 2021. However, it swings back to a negative figure in early 2022 at -$1,696 million, before gradually increasing again to reach $6,640 million by early 2025. This volatility suggests periods of financial strain or restructuring, followed by recovery phases, ultimately resulting in a strengthened equity base.

Invested capital

Invested capital shows an overall increasing pattern, beginning at $36,678 million in 2020, rising to $49,973 million in 2021, and experiencing some fluctuations before reaching a peak of $72,841 million in 2025. This growth reflects increased capital deployment, possibly through investments, acquisitions, or asset expansion aligning with the rise in debt levels.

In summary, the company appears to have expanded its capital base and debt load significantly over the period, while stockholders’ equity demonstrated volatility but ultimately improved. The overall increase in invested capital alongside growing debt indicates a strategy of leveraging to finance growth or operations, which has enhanced the total resources employed in the business.

Economic Profit

The economic profit exhibited fluctuations over the observed periods. It initially decreased from 8,072 million USD in early 2020 to 7,419 million USD in early 2021, then increased substantially to 11,600 million USD in early 2022. After reaching this peak, it gradually declined to 10,767 million USD in early 2023, 8,689 million USD in early 2024, and further to 6,907 million USD in early 2025. This suggests a recent downward trend in economic profit after a notable peak in 2022.

Invested Capital

The invested capital showed a consistent upward trend across the periods measured. Starting from 36,678 million USD in early 2020, it rose significantly to 49,973 million USD in early 2021. It experienced a slight decrease to 48,299 million USD in early 2022 but then increased steadily to 55,111 million USD in early 2023, 55,884 million USD in early 2024, and markedly to 72,841 million USD by early 2025. Overall, invested capital increased substantially over time, indicating growing resources committed to the business.

Economic Spread Ratio

The economic spread ratio revealed notable volatility over the periods. It decreased from 22.01% in early 2020 to 14.85% in early 2021, then sharply increased to 24.02% in early 2022. Following this peak, it declined to 19.54% in early 2023, and continued downward to 15.55% in early 2024 and 9.48% in early 2025. This pattern indicates that the efficiency of generating returns over invested capital saw a peak in 2022 but has been weakening since then.

Summary

The data reveals a simultaneous increase in invested capital and a declining trend in both economic profit and economic spread ratio from 2022 onward. This suggests that while more capital has been deployed into the business, the returns generated relative to the capital invested have been diminishing. The downward trend in the economic spread ratio, especially its drop after 2022, may indicate challenges in maintaining profitability levels or operational efficiency despite growing investment. Such trends could warrant further investigation into the drivers affecting profit generation and capital utilization efficiency.

The financial data exhibits several noteworthy trends over the six-year period in question.

Economic Profit

The economic profit demonstrates significant fluctuations. Starting at 8,072 million US dollars in 2020, it declined to 7,419 million in 2021, followed by a considerable increase to 11,600 million in 2022. Subsequently, it decreased in the following years to 10,767 million in 2023, 8,689 million in 2024, and further down to 6,907 million in 2025. This pattern indicates a peak in 2022 followed by a downward trend towards the end of the period.

Adjusted Net Sales

Adjusted net sales show a consistent upward trend throughout the period. Starting at 110,559 million US dollars in 2020, sales rose steadily each year, reaching 132,817 million in 2021, 151,930 million in 2022, 156,871 million in 2023, then slightly decreasing to 152,367 million in 2024 before rising again to 159,362 million in 2025. Overall, this reflects growth in sales volume despite minor fluctuations.

Economic Profit Margin

The economic profit margin reflects the proportion of economic profit relative to adjusted net sales. Initially, it decreased from 7.3% in 2020 to 5.59% in 2021, then rebounded to 7.63% in 2022. Following that, there was a declining trajectory with margins of 6.86% in 2023, 5.7% in 2024, and 4.33% in 2025. This decline in margin percentages over recent years suggests diminishing profitability in relation to sales despite their general increase.

In summary, while adjusted net sales generally increased over the period, the economic profit and economic profit margin showed volatility, peaking in 2022 and decreasing significantly afterward. This divergence indicates that although revenues have grown, the efficiency or profitability derived from those revenues has been declining in the later years.