# Write a high level financial statement analysis that identifies two or three key accounts that bear further investigation.

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

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

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

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