Home Depot Inc (HD)

Return on assets (ROA)

		Jan 31, 2025	Jan 31, 2024	Jan 28, 2024	Jan 31, 2023	Jan 29, 2023
Net income	US$ in thousands	14,806,000	15,143,000	15,143,000	17,105,000	17,105,000
Total assets	US$ in thousands	96,119,000	76,530,000	76,530,000	76,445,000	76,445,000
ROA		15.40%	19.79%	19.79%	22.38%	22.38%

January 31, 2025 calculation

ROA = Net income ÷ Total assets
= $14,806,000K ÷ $96,119,000K
= 15.40%

Based on the data provided, Home Depot Inc's return on assets (ROA) has shown a gradual decline over the past few years. As of January 31, 2025, the ROA stands at 15.40%, down from 22.38% in January 2023. This downward trend indicates that the company's ability to generate profit from its assets has decreased over time.

A high ROA typically indicates that a company is efficiently utilizing its assets to generate profit. The decreasing ROA for Home Depot Inc could be a result of various factors such as increasing costs, lower sales growth, or changes in asset utilization efficiency.

Investors and stakeholders may want to further investigate the reasons behind this decline in ROA to assess the company's financial performance and sustainability. It is important to consider both the numerator (net income) and denominator (average total assets) of the ROA equation to get a comprehensive understanding of the company's profitability and asset management.