HOME DEPOT INC
For the period ended Jan 28, 2024. Filed Mar 13, 2024.
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FY2024 · Filed Mar 13, 2024
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Non-GAAP Financial Measures
To provide clarity on our operating performance, we supplement our reporting with certain non-GAAP financial measures. However, this supplemental information should not be considered in isolation or as a substitute for the related GAAP measures. Non-GAAP financial measures presented herein may differ from similar measures used by other companies.
Return on Invested Capital
We believe ROIC is meaningful for investors and management because it measures how effectively we deploy our capital base. We define ROIC as NOPAT, a non-GAAP financial measure, for the most recent twelve-month period, divided by average debt and equity. We define average debt and equity as the average of beginning and ending long-term debt (including current installments) and equity for the most recent twelve-month period.
The following table presents the calculation of ROIC, together with a reconciliation of NOPAT to net earnings (the most comparable GAAP measure):
| Fiscal | Fiscal | Fiscal | |
|---|---|---|---|
| dollars in millions | 2023 | 2022 | 2021 |
| Net earnings | $15,143 | $17,105 | $16,433 |
| Interest and other, net | 1,765 | 1,562 | 1,303 |
| Provision for income taxes | 4,781 | 5,372 | 5,304 |
| Operating income | 21,689 | 24,039 | 23,040 |
| Income tax adjustment (1) | (5,205) | (5,745) | (5,622) |
| NOPAT | $16,484 | $18,294 | $17,418 |
| Average debt and equity | $44,955 | $41,055 | $38,946 |
| ROIC | 36.7% | 44.6% | 44.7% |
(1)Income tax adjustment is defined as operating income multiplied by our effective tax rate for the trailing twelve months.
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