COMPREHENSIVE PROBLEM 4. Home Depot, Inc. ANALYSIS OF THE FINANCIAL STATEMENTS OF A PUBLICLY OWNED CORPORATION This Comprehensive Problem is to acquaint you with the content of the 2018 financial state- ments of Home Depot, Inc., reproduced in Appendix A of this textbook. (The 2018 financial statements are for the fiscal year ended February 3, 2019) The problem contains three major parts, which are independent of one another: Part / is designed to familiarize you with the general contents of a company's financial statements: Part Il involves analysis of the compa- ny's liquidity; and Part III analyzes the trend in its profitability. If you work this problem as a group assignment, each group member should be prepared to discuss the group's findings and conclusions in class, A good starting point for understanding the financial statements of a company such as Home Depot, Inc., is to understand the accounting policies used in preparing those state ments. The first note accompanying the financial statements provides a brief description of the major accounting policies the company used. Many of the arcas discussed in this note have been covered in this text. Part 1 Annual reports include not only comparative financial statements but also other sources of information, such as: A multicar summary of selected information comparing key financial and other statistics for the past 5 or 10 years - Several pages of Moles that accompany the financial statements, Reports by management and by the independent auditors in which they express their respective responsibilities for the financial statements. Instructions Answer each of the following questions and explain where in the statements, notes, or other Sections of the annual report you located the information used in your answer. a. How many years are covered in each of the primary comparative financial statements? Were all of these statements audited? Name the auditors. What were the auditors' conclusions con- cerning these statements? b. Home Depot, Inc., combines its statement of retained earnings with another financial state- ment. Where are details about changes in the amount of retained earnings found? Over the years presented, have the company's annual net cash flows been positive or negative from (1) operating activities. (2) investing activities, and (3) financing activities? Has the company's cash balance increased or decreased during each of these years? COMPREHENSIVE PROBLEM 4. Home Depot, Inc. ANALYSIS OF THE FINANCIAL STATEMENTS OF A PUBLICLY OWNED CORPORATION This Comprehensive Problem is to acquaint you with the content of the 2018 financial state- ments of Home Depot, Inc., reproduced in Appendix A of this textbook. (The 2018 financial statements are for the fiscal year ended February 3, 2019) The problem contains three major parts, which are independent of one another: Part / is designed to familiarize you with the general contents of a company's financial statements: Part Il involves analysis of the compa- ny's liquidity; and Part III analyzes the trend in its profitability. If you work this problem as a group assignment, each group member should be prepared to discuss the group's findings and conclusions in class, A good starting point for understanding the financial statements of a company such as Home Depot, Inc., is to understand the accounting policies used in preparing those state ments. The first note accompanying the financial statements provides a brief description of the major accounting policies the company used. Many of the arcas discussed in this note have been covered in this text. Part 1 Annual reports include not only comparative financial statements but also other sources of information, such as: A multicar summary of selected information comparing key financial and other statistics for the past 5 or 10 years - Several pages of Moles that accompany the financial statements, Reports by management and by the independent auditors in which they express their respective responsibilities for the financial statements. Instructions Answer each of the following questions and explain where in the statements, notes, or other Sections of the annual report you located the information used in your answer. a. How many years are covered in each of the primary comparative financial statements? Were all of these statements audited? Name the auditors. What were the auditors' conclusions con- cerning these statements? b. Home Depot, Inc., combines its statement of retained earnings with another financial state- ment. Where are details about changes in the amount of retained earnings found? Over the years presented, have the company's annual net cash flows been positive or negative from (1) operating activities. (2) investing activities, and (3) financing activities? Has the company's cash balance increased or decreased during each of these years