Home Depot Inc (HD)
Profitability ratios
Return on sales
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 33.38% | 33.53% | 33.63% | 33.95% | 34.09% |
| Operating profit margin | 14.21% | 15.27% | 15.24% | 13.84% | 14.37% |
| Pretax margin | 13.05% | 14.28% | 14.38% | 12.85% | 13.35% |
| Net profit margin | 9.92% | 10.87% | 10.87% | 9.74% | 10.20% |
The profitability ratios of Home Depot Inc over the past five years show a slight decline in margins, indicating some challenges in maintaining profitability. The gross profit margin has been fairly consistent, hovering around 33-34%, reflecting the company's ability to efficiently manage costs related to sales.
However, the operating profit margin displayed some fluctuations, with a noticeable decrease in the most recent year, indicating potential issues with operating expenses. The pretax margin and net profit margin also experienced a downward trend, showcasing a reduced ability to generate profits before and after tax expenses.
Overall, while Home Depot Inc has maintained relatively healthy profitability ratios, there appears to be a need for the company to focus on controlling operating expenses and improving efficiency to enhance overall profitability in the future.
Return on investment
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 28.34% | 31.45% | 32.06% | 25.90% | 30.92% |
| Return on assets (ROA) | 19.79% | 22.38% | 22.86% | 18.23% | 21.94% |
| Return on total capital | 2,094.54% | 1,542.51% | — | 555.47% | — |
| Return on equity (ROE) | 1,450.48% | 1,095.07% | — | 390.00% | — |
Home Depot Inc has consistently demonstrated strong profitability based on its key financial ratios over the past five years. The operating return on assets (Operating ROA) has ranged from 25.90% to 32.06%, with a notable dip in the most recent year to 28.34%. This ratio indicates the company's efficiency in generating profits from its assets dedicated to operations.
The return on assets (ROA) has also been impressive, ranging from 18.23% to 22.86%. This ratio reflects Home Depot's ability to generate earnings relative to its total assets, and it shows a steady performance over the years.
The return on total capital has shown significant volatility, with values ranging from 555.47% to 2,094.54%. This could indicate fluctuations in the company's capital structure or investment efficiency. Further analysis is needed to understand the drivers behind these fluctuations.
The return on equity (ROE) has been consistently high, ranging from 390.00% to 1,450.48%. This indicates a strong ability to generate profits from shareholders' equity, reflecting positively on the company's financial performance and management.
In summary, Home Depot Inc's profitability ratios suggest a robust financial performance, with a focus on effective asset utilization and strong returns for both investors and stakeholders.