Stock Analysis on Net

Lowe’s Cos. Inc. (NYSE:LOW)

Analysis of Operating Leases

Microsoft Excel

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

Lowe’s Cos. Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
Adjustment to Total Assets
Total assets (as reported) 43,102 41,795 43,708 44,640 46,735 39,471
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1
Total assets (adjusted) 43,102 41,795 43,708 44,640 46,735 39,471
Adjustment to Total Debt
Total debt (as reported) 35,487 35,921 33,960 24,727 21,780 19,306
Add: Operating lease liability (before adoption of FASB Topic 842)2
Add: Current operating lease liabilities 563 487 522 636 541 501
Add: Noncurrent operating lease liabilities 3,628 3,737 3,512 4,021 3,890 3,943
Total debt (adjusted) 39,678 40,145 37,994 29,384 26,211 23,750

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).

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


Lowe’s Cos. Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios for Operating Leases (Summary)

Lowe’s Cos. Inc., adjusted financial ratios

Microsoft Excel
Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
Total Asset Turnover1
Reported total asset turnover 1.94 2.07 2.22 2.16 1.92 1.83
Adjusted total asset turnover 1.94 2.07 2.22 2.16 1.92 1.83
Debt to Equity2
Reported debt to equity 15.16 9.79
Adjusted debt to equity 18.24 12.04
Return on Assets3 (ROA)
Reported ROA 16.14% 18.49% 14.73% 18.91% 12.49% 10.85%
Adjusted ROA 16.14% 18.49% 14.73% 18.91% 12.49% 10.85%

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Lowe’s Cos. Inc. adjusted total asset turnover ratio deteriorated from 2023 to 2024 and from 2024 to 2025.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Lowe’s Cos. Inc. adjusted ROA improved from 2023 to 2024 but then slightly deteriorated from 2024 to 2025 not reaching 2023 level.

Lowe’s Cos. Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel
Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net sales 83,674 86,377 97,059 96,250 89,597 72,148
Total assets 43,102 41,795 43,708 44,640 46,735 39,471
Activity Ratio
Total asset turnover1 1.94 2.07 2.22 2.16 1.92 1.83
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net sales 83,674 86,377 97,059 96,250 89,597 72,148
Adjusted total assets 43,102 41,795 43,708 44,640 46,735 39,471
Activity Ratio
Adjusted total asset turnover2 1.94 2.07 2.22 2.16 1.92 1.83

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).

2025 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 83,674 ÷ 43,102 = 1.94

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 83,674 ÷ 43,102 = 1.94

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

Adjusted Debt to Equity

Microsoft Excel
Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Total debt 35,487 35,921 33,960 24,727 21,780 19,306
Shareholders’ equity (deficit) (14,231) (15,050) (14,254) (4,816) 1,437 1,972
Solvency Ratio
Debt to equity1 15.16 9.79
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt 39,678 40,145 37,994 29,384 26,211 23,750
Shareholders’ equity (deficit) (14,231) (15,050) (14,254) (4,816) 1,437 1,972
Solvency Ratio
Adjusted debt to equity2 18.24 12.04

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).

2025 Calculations

1 Debt to equity = Total debt ÷ Shareholders’ equity (deficit)
= 35,487 ÷ -14,231 =

2 Adjusted debt to equity = Adjusted total debt ÷ Shareholders’ equity (deficit)
= 39,678 ÷ -14,231 =


Adjusted Return on Assets (ROA)

Microsoft Excel
Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net earnings 6,957 7,726 6,437 8,442 5,835 4,281
Total assets 43,102 41,795 43,708 44,640 46,735 39,471
Profitability Ratio
ROA1 16.14% 18.49% 14.73% 18.91% 12.49% 10.85%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net earnings 6,957 7,726 6,437 8,442 5,835 4,281
Adjusted total assets 43,102 41,795 43,708 44,640 46,735 39,471
Profitability Ratio
Adjusted ROA2 16.14% 18.49% 14.73% 18.91% 12.49% 10.85%

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).

2025 Calculations

1 ROA = 100 × Net earnings ÷ Total assets
= 100 × 6,957 ÷ 43,102 = 16.14%

2 Adjusted ROA = 100 × Net earnings ÷ Adjusted total assets
= 100 × 6,957 ÷ 43,102 = 16.14%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Lowe’s Cos. Inc. adjusted ROA improved from 2023 to 2024 but then slightly deteriorated from 2024 to 2025 not reaching 2023 level.