Home Depot $($HD$)$ is a retailer of home improvement and construction products. Home

Depot is currently the world$$s largest home improvement retailer with revenues

exceeding $$83$ billion in its fiscal year ending February $1,2015.$

The most commonly used inventory valuation methods are first$-$in first$-$out, last$-$in first$-$

out, and average or weighted average cost. See the excerpts to follow from Home Depot$$s

$2015$ Form $10-$K: its Consolidated Balance Sheet and a section from its Notes to

Financial Statements $($page $3536).$

Questions

$1.$ Which method does Home Depot use to value its inventory?

$2.$ What is shrink and how can a company prevent it$?$

$3.$ What is the main difference between the FIFO, LIFO, and weighted average cost

inventory valuation methods?

$4.$ What benefits would using the FIFO method for inventory valuation provide for

Home Depot?