Two-Component Disaggregation of ROE

Home Depot Inc., decomposition of ROE

ROE Jan 29, 2012 Jan 30, 2011 Jan 31, 2010 Feb 1, 2009 Feb 3, 2008 Jan 28, 2007 21.70% 17.67% 13.72% 12.71% 24.81% 23.02%

ROA 9.58% 8.32% 6.51% 5.49% 9.92% 11.02%

Leverage

Source: Based on data from Home Depot Inc. Annual Reports

The primary reason for the increase in Return on Equity (ROE) over 2012 year is the increase in profitability measured by Return on Assets (ROA).
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Three-Component Disaggregation of ROE

Home Depot Inc., decomposition of ROE

Jan 29, 2012 Jan 30, 2011 Jan 31, 2010 Feb 1, 2009 Feb 3, 2008 Jan 28, 2007

ROE 21.70% 17.67% 13.72% 12.71% 24.81% 23.02%

Net Profit Margin 5.52% 4.91% 4.02% 3.17% 5.68% 6.34%

Asset Turnover 1.74 1.69 1.62 1.73 1.75 1.74

Leverage 2.26 2.12 2.11 2.32 2.50 2.09

Source: Based on data from Home Depot Inc. Annual Reports

The primary reason for the increase in Return on Equity (ROE) over 2012 year is the increase in profitability measured by Net Profit Margin.
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Five-Component Disaggregation of ROE

Home Depot Inc., decomposition of ROE

ROE Jan 29, 2012 Jan 30, 2011 Jan 31, 2010 Feb 1, 2009 Feb 3, 2008 Jan 28, 2007 21.70 % 17.67 % 13.72 % 12.71 % 24.81 % 23.02 %

Tax Burden 0.64 0.63 0.66 0.64 0.65 0.62

Interest Burden 0.91 0.91 0.86 0.85 0.91 0.96

EBIT Margin 9.48% 8.53% 7.10% 5.84% 9.70% 10.68%

Asset Turnover 1.74 1.69 1.62 1.73 1.75 1.74

Leverag e 2.26 2.12 2.11 2.32 2.50 2.09

Source: Based on data from Home Depot Inc. Annual Reports

The primary reason for the increase in Return on Equity (ROE) over 2012 year is the increase in operating profitability measured by EBIT Margin.
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Two-Way Decomposition of ROA

Home Depot Inc., decomposition of ROA

ROA Jan 29, 2012 Jan 30, 2011 Jan 31, 2010 Feb 1, 2009 Feb 3, 2008 Jan 28, 2007 9.58% 8.32% 6.51% 5.49% 9.92% 11.02%

Net Profit Margin 5.52% 4.91% 4.02% 3.17% 5.68% 6.34%

Asset Turnover

Source: Based on data from Home Depot Inc. Annual Reports

The primary reason for the increase in Return on Assets (ROA) over 2012 year is the increase in profitability measured by Net Profit Margin.
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Four-Way Decomposition of ROA

Home Depot Inc., decomposition of ROA

Jan 29, 2012 Jan 30, 2011 Jan 31, 2010 Feb 1, 2009 Feb 3, 2008 Jan 28, 2007

ROA = 9.58% 8.32% 6.51% 5.49% 9.92% 11.02%

Tax Burden 0.64 0.63 0.66 0.64 0.65 0.62

Interest Burden 0.91 0.91 0.86 0.85 0.91 0.96

EBIT Margin 9.48% 8.53% 7.10% 5.84% 9.70% 10.68%

Asset Turnover 1.74 1.69 1.62 1.73 1.75 1.74

Source: Based on data from Home Depot Inc. Annual Reports

The primary reason for the increase in Return on Assets (ROA) over 2012 year is the increase in operating profitability measured by EBIT Margin.
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Decomposition of Net Profit Margin

Home Depot Inc., decomposition of Net Profit Margin

Jan 29, 2012 Jan 30, 2011 Jan 31, 2010

Net Profit Margin 5.52% 4.91% 4.02%

Tax Burden 0.64 0.63 0.66

Interest Burden 0.91 0.91 0.86

EBIT Margin 9.48% 8.53% 7.10%

Feb 1, 2009 Feb 3, 2008 Jan 28, 2007

3.17% 5.68% 6.34%

0.64 0.65 0.62

0.85 0.91 0.96

5.84% 9.70% 10.68%

Source: Based on data from Home Depot Inc. Annual Reports

The primary reason for the increase in Net Profit Margin over 2012 year is the increase in operating profitability measured by EBIT Margin.