Home Depot Inc (HD)

Return on equity (ROE)

		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 stockholders’ equity	US$ in thousands	6,640,000	1,044,000	1,044,000	1,562,000	1,562,000
ROE		222.98%	1,450.48%	1,450.48%	1,095.07%	1,095.07%

January 31, 2025 calculation

ROE = Net income ÷ Total stockholders’ equity
= $14,806,000K ÷ $6,640,000K
= 222.98%

To analyze Home Depot Inc's return on equity (ROE) based on the provided data:

1. In January 2023, Home Depot Inc's ROE was exceptionally high at 1,095.07%. This indicates that for every dollar of shareholders' equity invested, the company generated a return of 1095.07%. This may suggest efficient utilization of shareholders' funds to generate profits.

2. The ROE remained stable at 1,095.07% in January 2023. Consistent high ROE levels over time can be a positive sign of the company's ability to generate profits relative to its equity base.

3. In January 2024, Home Depot Inc experienced a significant increase in ROE to 1,450.48%. This sharp rise could imply improved profitability or more efficient management of assets and liabilities to generate higher returns for shareholders.

4. The elevated ROE of 1,450.48% was sustained in January 2024. This continued high performance suggests that the company maintained its profitability and efficient use of equity.

5. By January 2025, Home Depot Inc's ROE decreased to 222.98%. While still positive, this decline from the previous years could indicate a drop in the company's profitability relative to its equity base.

In conclusion, Home Depot Inc has shown strong and consistent ROE figures from January 2023 to January 2024, reflecting efficient utilization of equity to generate profits. However, the decrease in ROE in January 2025 may warrant further investigation into the factors impacting the company's profitability in that period.