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