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Financial statement analysis of Home Depot
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Financial Statement Ratio Analysis

Financial statement analysis of Home Depot

1. Write a high level financial statement analysis that identifies two or three key accounts that bear further investigation. (i.e. Inventory, LTD, other assets)
2. Identify which ratios (if not all the ratios) will be selected for the analysis.  Each class must be presented as part of the case. The ratio analysis should show at least 3 periods in order to properly develop performance patterns. The use of charts, tables and graphs is encouraged to present the data for analysis.
3. Within each class, a conclusion on overall context of the ratio analysis, there must be a logical integration of the significant accounts identified in the financial statement review to the selected ratios.
4. Present an overall conclusion based solely on the overall financial performance presented  on the relative strength of the company. Based on the financial performance of the company, as presented in the ratio analysis recommend to sell, hold or buy stock in the company.

Example outline:

1. Financial statement (Balance sheet, Income Statement and Cash Flow statement) key account identification.
2. Ratio analysis, by class: What each ratio tells us?
1. Liquidity
1. Current
2. Quick
2. Asset Management
1. Days sales outstanding
2. Inventory turnover
3. Total assets turnover
3. Debt Management
1. Debt to assets ratio
2. Times interest earned
4. Profitability
1. Profit margin on sales
2. Return on total assets
3. Return on common equity
5. Market Value
1. Price/Earnings
2. Market/Book
3. Explain each ratio
4. Conclusion with reason

-NYQ Follow

91.89 0.45(0.49%) 4:00PM EDT

|After Hours : 91.80 0.09 (0.10%) 7:06PM EDT

The Home Depot, Inc. (HD)

 Top of Form Bottom of Form Income Statement
 View: Annual Data | Quarterly Data All numbers in thousands

 Period Ending Feb 2, 2014 Feb 3, 2013 Jan 29, 2012 Total Revenue 78,812,000 74,754,000 70,395,000 Cost of Revenue 51,422,000 48,912,000 46,133,000 Gross Profit 27,390,000 25,842,000 24,262,000 Operating Expenses Research Development - - - Selling General and Administrative 16,597,000 16,508,000 16,028,000 Non Recurring - - - Others 1,627,000 1,568,000 1,573,000 Total Operating Expenses - - - Operating Income or Loss 9,166,000 7,766,000 6,661,000 Income from Continuing Operations Total Other Income/Expenses Net 12,000 87,000 13,000 Earnings Before Interest And Taxes 9,178,000 7,853,000 6,674,000 Interest Expense 711,000 632,000 606,000 Income Before Tax 8,467,000 7,221,000 6,068,000 Income Tax Expense 3,082,000 2,686,000 2,185,000 Minority Interest - - - Net Income From Continuing Ops 5,385,000 4,535,000 3,883,000 Non-recurring Events Discontinued Operations - - - Extraordinary Items - - - Effect Of Accounting Changes - - - Other Items - - - Net Income 5,385,000 4,535,000 3,883,000 Preferred Stock And Other Adjustments - - - Net Income Applicable To Common Shares 5,385,000 4,535,000 3,883,000

The Home Depot, Inc. (HD)

 Top of Form Bottom of Form Balance Sheet
 View: Annual Data | Quarterly Data All numbers in thousands

 Period Ending Feb 2, 2014 Feb 3, 2013 Jan 29, 2012 Assets Current Assets Cash And Cash Equivalents 1,929,000 2,494,000 1,987,000 Short Term Investments - - - Net Receivables 1,398,000 1,395,000 1,245,000 Inventory 11,057,000 10,710,000 10,325,000 Other Current Assets 895,000 773,000 963,000 Total Current Assets 15,279,000 15,372,000 14,520,000 Long Term Investments - - 135,000 Property Plant and Equipment 23,348,000 24,069,000 24,448,000 Goodwill 1,289,000 1,170,000 1,120,000 Intangible Assets - - - Accumulated Amortization - - - Other Assets 602,000 473,000 295,000 Deferred Long Term Asset Charges - - - Total Assets 40,518,000 41,084,000 40,518,000 Liabilities Current Liabilities Accounts Payable 9,379,000 8,871,000 8,199,000 Short/Current Long Term Debt 33,000 1,321,000 30,000 Other Current Liabilities 1,337,000 1,270,000 1,147,000 Total Current Liabilities 10,749,000 11,462,000 9,376,000 Long Term Debt 14,691,000 9,475,000 10,758,000 Other Liabilities 2,042,000 2,051,000 2,146,000 Deferred Long Term Liability Charges 514,000 319,000 340,000 Minority Interest - - - Negative Goodwill - - - Total Liabilities 27,996,000 23,307,000 22,620,000 Stockholders' Equity Misc Stocks Options Warrants - - - Redeemable Preferred Stock - - - Preferred Stock - - - Common Stock 88,000 88,000 87,000 Retained Earnings 23,180,000 20,038,000 17,246,000 Treasury Stock (19,194,000) (10,694,000) (6,694,000) Capital Surplus 8,402,000 7,948,000 6,966,000 Other Stockholder Equity 46,000 397,000 293,000 Total Stockholder Equity 12,522,000 17,777,000 17,898,000 Net Tangible Assets 11,233,000 16,607,000 16,778,000

The Home Depot, Inc. (HD)

 Top of Form Bottom of Form Cash Flow
 View: Annual Data | Quarterly Data All numbers in thousands

 Period Ending Feb 2, 2014 Feb 3, 2013 Jan 29, 2012 Net Income 5,385,000 4,535,000 3,883,000 Operating Activities, Cash Flows Provided By or Used In Depreciation 1,757,000 1,684,000 1,682,000 Adjustments To Net Income 228,000 315,000 215,000 Changes In Accounts Receivables (15,000) (143,000) (170,000) Changes In Liabilities 812,000 726,000 405,000 Changes In Inventories (455,000) (350,000) 256,000 Changes In Other Operating Activities (84,000) 208,000 380,000 Total Cash Flow From Operating Activities 7,628,000 6,975,000 6,651,000 Investing Activities, Cash Flows Provided By or Used In Capital Expenditures (1,389,000) (1,312,000) (1,221,000) Investments - - - Other Cash flows from Investing Activities (118,000) (120,000) 92,000 Total Cash Flows From Investing Activities (1,507,000) (1,432,000) (1,129,000) Financing Activities, Cash Flows Provided By or Used In Dividends Paid (2,243,000) (1,743,000) (1,632,000) Sale Purchase of Stock (8,305,000) (3,200,000) (3,164,000) Net Borrowings 3,933,000 (32,000) 966,000 Other Cash Flows from Financing Activities (37,000) (59,000) (218,000) Total Cash Flows From Financing Activities (6,652,000) (5,034,000) (4,048,000) Effect Of Exchange Rate Changes (34,000) (2,000) (32,000) Change In Cash and Cash Equivalents (531,000) 509,000 1,474,000

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• Financial statement analysis of Home Depot
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Founded in 1978, Home Depot is the largest home improv

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