Stock Analysis on Net

Home Depot Inc. (NYSE:HD)

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin 

Microsoft Excel

Two-Component Disaggregation of ROE

Home Depot Inc., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Feb 2, 2025 222.98% = 15.40% × 14.48
Jan 28, 2024 1,450.48% = 19.79% × 73.30
Jan 29, 2023 1,095.07% = 22.38% × 48.94
Jan 30, 2022 = 22.86% ×
Jan 31, 2021 390.00% = 18.23% × 21.39
Feb 2, 2020 = 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).

The primary reason for the decrease in return on equity ratio (ROE) over 2025 year is the decrease in financial leverage ratio.


Three-Component Disaggregation of ROE

Home Depot Inc., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Feb 2, 2025 222.98% = 9.28% × 1.66 × 14.48
Jan 28, 2024 1,450.48% = 9.92% × 1.99 × 73.30
Jan 29, 2023 1,095.07% = 10.87% × 2.06 × 48.94
Jan 30, 2022 = 10.87% × 2.10 ×
Jan 31, 2021 390.00% = 9.74% × 1.87 × 21.39
Feb 2, 2020 = 10.20% × 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).

The primary reason for the decrease in return on equity ratio (ROE) over 2025 year is the decrease in financial leverage ratio.


Five-Component Disaggregation of ROE

Home Depot Inc., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Feb 2, 2025 222.98% = 0.76 × 0.89 × 13.62% × 1.66 × 14.48
Jan 28, 2024 1,450.48% = 0.76 × 0.91 × 14.32% × 1.99 × 73.30
Jan 29, 2023 1,095.07% = 0.76 × 0.93 × 15.31% × 2.06 × 48.94
Jan 30, 2022 = 0.76 × 0.94 × 15.27% × 2.10 ×
Jan 31, 2021 390.00% = 0.76 × 0.93 × 13.87% × 1.87 × 21.39
Feb 2, 2020 = 0.76 × 0.92 × 14.44% × 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).

The primary reason for the decrease in return on equity ratio (ROE) over 2025 year is the decrease in financial leverage ratio.


Two-Component Disaggregation of ROA

Home Depot Inc., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Feb 2, 2025 15.40% = 9.28% × 1.66
Jan 28, 2024 19.79% = 9.92% × 1.99
Jan 29, 2023 22.38% = 10.87% × 2.06
Jan 30, 2022 22.86% = 10.87% × 2.10
Jan 31, 2021 18.23% = 9.74% × 1.87
Feb 2, 2020 21.94% = 10.20% × 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).

The primary reason for the decrease in return on assets ratio (ROA) over 2025 year is the decrease in asset turnover ratio.


Four-Component Disaggregation of ROA

Home Depot Inc., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Feb 2, 2025 15.40% = 0.76 × 0.89 × 13.62% × 1.66
Jan 28, 2024 19.79% = 0.76 × 0.91 × 14.32% × 1.99
Jan 29, 2023 22.38% = 0.76 × 0.93 × 15.31% × 2.06
Jan 30, 2022 22.86% = 0.76 × 0.94 × 15.27% × 2.10
Jan 31, 2021 18.23% = 0.76 × 0.93 × 13.87% × 1.87
Feb 2, 2020 21.94% = 0.76 × 0.92 × 14.44% × 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).

The primary reason for the decrease in return on assets ratio (ROA) over 2025 year is the decrease in efficiency measured by asset turnover ratio.


Disaggregation of Net Profit Margin

Home Depot Inc., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Feb 2, 2025 9.28% = 0.76 × 0.89 × 13.62%
Jan 28, 2024 9.92% = 0.76 × 0.91 × 14.32%
Jan 29, 2023 10.87% = 0.76 × 0.93 × 15.31%
Jan 30, 2022 10.87% = 0.76 × 0.94 × 15.27%
Jan 31, 2021 9.74% = 0.76 × 0.93 × 13.87%
Feb 2, 2020 10.20% = 0.76 × 0.92 × 14.44%

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).

The primary reason for the decrease in net profit margin ratio over 2025 year is the decrease in operating profitability measured by EBIT margin ratio.