a-1. Compute the companys current ratio and quick ratio for the most recent year reported.

a-2. Do these ratios provide support that Home Depot is able to repay its current liabilities as they come due?

b-1. Compute the company's debt ratio.

b-2. Does Home Depot appear to have excessive debt?

c. Does Home Depot's cash flow from operating activities appear adequate to cover its current liabilities as they come due?

Appendix A Home Depot 2015 Financial Statements THE HOME DEPOT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS amounts in millions, except per share data Fiscal Year Ended January 31, February 1, 2016 2015 $ 88,519 $ 83,176 58,254 54.787 30,265 28,389 February 2, 2014 $ 78,812 51.897 26,915 16,801 1,690 18.491 11,774 16.280 1,640 17,920 10,469 16.122 1.627 17.749 9.166 NET SALES Cost of Sales GROSS PROFIT Operating Expenses: Selling, General and Administrative Depreciation and Amortization Total Operating Expenses OPERATING INCOME Interest and Other (Income) Expense: Interest and Investment Income Interest Expense Interest and Other, net EARNINGS BEFORE PROVISION FOR INCOME TAXES Provision for Income Taxes NET EARNINGS Weighted Average Common Shares BASIC EARNINGS PER SHARE Diluted Weighted Average Common Shares DILUTED EARNINGS PER SHARE (166) 919 753 11,021 4,012 7.009 1,277 5.495 1,283 5.46 (337) 830 493 9,976 3.631 6,345 1.338 4.74 1,346 4.71 (12) 711 699 8,467 3.082 5.385 5 $ $ 1,425 3.78 1.434 3.76 $ $ $ (1) Fiscal years ended January 31, 2016, February 1, 2015 and February 2, 2014 include 52 weeks. See accompanying Notes to Consolidated Financial Statements. Appendix A Home Depot 2015 Financial Statements THE HOME DEPOT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME amounts in millions Fiscal Year Ended!) January 31, February 1, February 2, 2015 2014 $ 7,009 S 6,345 $ 5,385 Net Earnings Other Comprehensive Loss: Foreign Currency Translation Adjustments Cash Flow Hedges, net of tax Other Total Other Comprehensive Loss COMPREHENSIVE INCOME (412) (34) (510) 11 (329) (12) (10) (446) (351) (498) 5.847 $ 6,563 $ 5.034 (1) Fiscal years ended January 31, 2016, February 1, 2015 and February 2, 2014 include 52 weeks. See accompanying Notes to Consolidated Financial Statements. 4.6 Appendix A Home Depot 2015 Financial Statements THE HOME DEPOT, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS amounts in millions, except share and per share data January 31, 2016 February 1, 2015 $ S 2,216 1,890 11,809 1,078 16,993 39,266 17,075 22,191 2,102 1.263 42,549 1,723 1,484 11,079 1,016 15.302 38,513 15.793 22.720 1.353 571 39.946 $ $ S 290 5,807 1.391 ASSETS Current Assets: Cash and Cash Equivalents Receivables, net Merchandise Inventories Other Current Assets Total Current Assets Property and Equipment, at cost Less Accumulated Depreciation and Amortization Net Property and Equipment Goodwill Other Assets Total Assets LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Short-Term Debt Accounts Payable Accrued Salaries and Related Expenses Sales Taxes Payable Deferred Revenue Income Taxes Payable Current Installments of Long-Term Debt Other Accrued Expenses Total Current Liabilities Long-Term Debt, excluding current installments Other Long-Term Liabilities Deferred Income Taxes Total Liabilities STOCKHOLDERS' EQUITY Common Stock, par value 50.05: authorized: 10 billion shares: issued: 1.772 billion shares at January 31, 2016 and 1.768 billion shares at February 1, 2015, outstanding: 1.252 billion shares at January 31, 2016 and 1.307 billion shares at February 1, 2015 Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock, at cost, 520 million shares at January 31, 2016 and 461 million shares at February 1, 2015 Total Stockholders' Equity Total Liabilities and Stockholders' Equity See accompanying Notes to Consolidated Financial Statements. 1,468 35 350 6,565 1,515 476 1,566 34 77 1,943 12.526 20,888 1,965 854 36,233 38 1.806 11.269 16,869 1.844 642 30.624 9,347 30,973 (898) 8.885 26.995 (452) (33,194) 6,316 (26,194) 9.322 39.946 42,549 Appendix A Home Depot 2015 Financial Statements THE HOME DEPOT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Common Stock - Paid In Shares Amount Capital 1,754 $ 88 $ 7,948 Retained Earnings $ 20,038 5,385 - Accumulated Other Comprehensive Income (Loss) $ 397 Treasury Stock Shares Amount (270) $ (10,694) Stockholders Equity $ 17,777 5,385 103 123 (329) (12) 7 103 (329 - (111) (8.500) 228 (8,500) (2.243) (2.243) (10) (10) 1,761 S. 88 $ 8,402 23,180 S 1,761 8,402 $ +6 (381) S (19,194 $ 23,180 6,345 (19,194) 122 amounts in millions, except per share data Balance, February 3, 2013 Net Earnings Shares Issued Under Employee Stock Plans Tax Effect of Stock-Based Compensation Foreign Currency Translation Adjustments Cash Flow Hedges, net of tax Stock Options, Awards and Amortization of Restricted Stock Repurchases of Common Stock Cash Dividends ($1.56 per share) Other Balance, February 2, 2014 Net Earnings Shares Issued Under Employee Stock Plans Tax Effect of Stock-Based Compensation Foreign Currency Translation Adjustments Cash Flow Hedges, net of tax Stock Options, Awards and Amortization of Restricted Stock Repurchases of Common Stock Cash Dividends ($1.88 per share) Other Balance, February 1, 2015 Net Earnings Shares Issued Under Employee Stock Plans Tax Effect of Stock-Based Compensation Foreign Currency Translation Adjustments Cash Flow Hedges, net of tax Stock Options, Awards and Amortization of Restricted Stock Repurchases of Common Stock Cash Dividends ($2.36 per share) Balance, January 31, 2016 12,522 6,345 122 136 (510) 136 (80) (7.000) 225 (7.000) (2.530) (2.530) 1.768 $ 8,885 $ $ (26,194) $ 26,995 7.009 9,322 7.009 (412) (34) 145 (412) (34) 244 (59) (7.000) (3.031) (7.000) (3.031) 6,316 1,772 $ 88 $ 9,347 S 30,973 (898) (520) $ (33,194) $ See accompanying Notes to Consolidated Financial Statements. THE HOME DEPOT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS 228 Fiscal Year Ended amounts in millions January 31, February 1, February 2, 2016 2015 2014 CASH FLOWS FROM OPERATING ACTIVITIES: Net Earnings $ 7,009 $ 6345 S 5385 Reconciliation of Net Earnings to Net Cash Provided by Operating Activities: Depreciation and Amortization 1,863 1.786 1.757 Stock-Based Compensation Expense 244 225 Gain on Sales of Investments (144) (323) Changes in Assets and Liabilities, net of the effects of acquisitions: Receivables, net (181) (81) (15) Merchandise Inventories (546) (124) (455) Other Current Assets (5) (199) (5) Accounts Payable and Accrued Expenses 888 244 605 Deferred Revenue 109 146 Income Taxes Payable 154 168 119 Deferred Income Taxes 15 159 (31) Other (33) (104) (35) Net Cash Provided by Operating Activities 9,373 8.242 7,628 CASH FLOWS FROM INVESTING ACTIVITIES: Capital Expenditures, net of $165. $217 and $46 of non-cash capital expenditures in fiscal 2015, 2014 and 2013, respectively (1,503) (1.442) (1,389) Proceeds from Sales of Investments 144 323 Payments for Businesses Acquired, net (1,666) (200) (206) Proceeds from Sales of Property and Equipment 43 Net Cash Used in Investing Activities (2,982) (1.271) (1.507) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Short-Term Borrowings, net 60 290 Proceeds from Long-Term Borrowings. net of discounts 3,991 1.981 5,222 Repayments of Long-Term Debt (39) (39) (1.289) Repurchases of Common Stock (7,000) (7.000) (8.546) Proceeds from Sales of Common Stock 228 252 241 Cash Dividends Paid to Stockholders (3,031) (2.530) (2.243) Other Financing Activities (25) (37) Net Cash Used in Financing Activities (5,787) (7,071) (6,652) Change in Cash and Cash Equivalents 604 (100) (531) Effect of Exchange Rate Changes on Cash and Cash Equivalents (111) (106) (34) Cash and Cash Equivalents at Beginning of Year 1,723 1.929 2.494 Cash and Cash Equivalents at End of Year $ 2,216 $ 1.723 S 1.929 SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS MADE FOR: Interest, net of interest capitalized $ 874 $ 782 S 639 Income Taxes $ 3,853 $ 3.435 $ 2.839 (1) Fiscal years ended January 31, 2016, February 1, 2015 and February 2, 2014 include 52 weeks. See accompanying Notes to Consolidated Financial Statements. 2011 70.395 35 6,068 3,883 16.3 2.47 22.9 1.570 33.9 24.4 0.8 8.6 5.5 Five-Year Summary of Financial and Operating Results The Home Depot, Inc. and Subsidiaries amounts in millions, except where noted 2015 2014 2013 2012 STATEMENT OF EARNINGS DATA Net sales $ 88,519 S 83.176 S 78.812 S 74,754 $ Net sales increase (%) 6.4 5.5 5.4 6.2 Earnings before provision for income taxes 11,021 9.976 8,467 7,221 Net earnings 7,009 6,345 5.385 4.535 Net earnings increase (e) 10.5 17.8 18.7 16.8 Diluted earnings per share ($) 5.46 4.71 3.76 3.00 Diluted earnings per share increase (%) 15.9 25.3 25.3 21.5 Diluted weighted average number of common shares 1,283 1.346 1,434 1.511 Gross margin-% of sales 34.2 34.1 34.2 34.0 Total operating expenses -% of sales 20.9 21.5 22.5 23.6 Interest and other, net-% of sales 0.9 0.6 0.9 0.7 Earnings before provision for income taxes - of sales 12.5 12.0 10.7 9.7 Net earnings - % of sales 7.9 7.6 6.8 6.1 BALANCE SHEET DATA AND FINANCIAL RATIOS Total assets $ 42,549 $ 39,946 $ 40,518 S 41,084 S Working capital 4,467 4.033 4.530 3.910 Merchandise inventories 11,809 11.079 11.057 10.710 Net property and equipment 22,191 22.720 23.348 24.069 Long-term debt 20,888 16.869 14.691 9.475 Stockholders' equity 6,316 9,322 12.522 17.777 Long-term debt-to-equity (%) 330.7 181.0 117.3 53.3 Total debt-to-equity (%) 337,5 184.5 117.6 60.7 Current ratio 1.36:1 1.36:1 1.42: 1 1 .34:1 Inventory turnover 4.9x 4.7x 4.6x 4.5x Return on invested capital (%) 28.0 24.9 20.9 17.0 STATEMENT OF CASH FLOWS DATA Depreciation and amortization 1,863 $ 1.786 S 1,757 $ 1.684 S Capital expenditures 1,503 1.442 1.389 1.312 Cash dividends per share ($) 2.360 1.880 1.560 1.160 STORE DATA Number of stores 2,274 2.269 2,263 2.256 Square footage at fiscal year-end 237 236 236 235 Average square footage per store (in thousands) 104 104 104 104 STORE SALES AND OTHER DATA Comparable store sales increase (34) 5.6 5.3 6.8 4.6 Sales per square foot ($) 371 334 319 Number of customer transactions) 1,501 1,442 1,391 1,364 Average ticket (5) 58.77 57.87 56.78 54.89 Number of associates at fiscal year-end (in thousands) 385 371 365 340 40.518 5.144 10.325 24.448 10.758 17.898 60.1 60.3 1.55:1 4.3x 14.9 1.682 1.221 1.040 2.252 235 104 352 3.4 299 1.318 53.28 331