Home depot SEC 10-K:

http://www.sec.gov/Archives/edgar/data/354950/000035495015000008/hd-212015x10xk.htm%23s4E96E662C03DD2741C1C4F74E859548F

There are THREE components of the project as follows:

Project Report

Compile your postings from the Project discussion area for Weeks 1-5 in a Word document. (Already compiled this area but I need it to be put under one good research paper with added information from the company history and the SEC 10-K)

I have attached thediscussions below!!!

Project Presentation

Prepare a PowerPoint presentation about the Top 7 items from Home Depot research and reading about the company. Focus on the use of cost information for operational and strategic planning at your company. Include your rationale for including each of these items on your Top 7 list.

Project Excel file

Extract some key quantitative, financial data about the performance of your company for a management report about the company. This presentation should include at least 4 key factors for use by operations, other functional, and executive level managers at the company. Provide an explanation about how each of these items can be used to manage the corporation. This report should emphasize the important partnership role of financial professionals in the management of the company.

Home Depot SEC 10K http://www.sec.gov/Archives/edgar/data/354950/000035495015000008/hd 212015x10xk.htm%23s4E96E662C03DD2741C1C4F74E859548F Financial Statements 1. What does your company produce? The Home Depot produces home improvement products. 2. What trends in sales, cost of goods sold, and gross profit do you see? Sales were $78,812 million in 2013 and $83,176 million in 2014, which increased sales with $4,364 million in 2014. Cost of goods sold was $51,422 million in 2013 and $54,222 million in 2014, which increased cost of goods sold with $2,800 in 2014. Gross profit was $27,390 million in 2013 and $28,954 million for 2014, which increased the gross profit with $1,564 million. 4. Diversity in products: comment on divisions and other reporting entities The Home Depot has an expanding proprietary brands such as HDX, Husky, Hampton Bay, Home Decorators Collection, Glacier Bay and Vigoro. Income Statement; Notes to the FS Inventory comments: costing information. What do you see? WIP? Retail operations in Canada and Mexico, and distribution centers, record Merchandise Inventories at the lower of cost or market, as determined by a cost method. These Merchandise Inventories represent approximately 26% of the total Merchandise Inventories balance. The Company evaluates the inventory valued using a cost method at the end of each quarter to ensure that it is carried at the lower of cost or market. Work in progress determines if the company is manufacturing with the scheduled plan ahead or not. Inventory: How is inventory described for your SEC 10K company? LIFO, FIFO, and / or average cost? Relate your answer to topics in our course. FIFO, meaning that the goods first added to inventory are assumed to be the first goods removed from inventory for sale. The majority of the Company's Merchandise Inventories are stated at the lower of cost or market, as determined by the retail inventory method. As the inventory retail value is adjusted regularly to reflect market conditions, the inventory valued using the retail method approximates the lower of cost or market. Cost and sources for production materials: notice how cost is used in the SEC 10K SEC 10K states that Cost of Sales includes the actual cost of merchandise sold and services performed, the cost of transportation of merchandise from vendors to the Company's stores, locations or customers, the operating cost of the Company's sourcing and distribution network and the cost of deferred interest programs offered through the Company's private label credit card program. SEC 10K states that the cost of handling and shipping merchandise from the Company's stores, locations or distribution centers to the customer are classified as SG&A. SEC 10K states that the cost of shipping and handling, including internal costs and payments to third parties, classified as SG&A was $443 million, $410 million and $394 million in fiscal 2014, 2013 and 2012, respectively which shows an increase in 11% from 2012 to 2014. Challenges and opportunities you see as you relate our current textbook topics to your company. Details are high level in the SEC 10K but organizations rely on Cost Accounting. Net earnings of 2014, 2013 and 2012 shows it was $6,345, $5,385 and 4,535 in millions respectively. This shows a decrease of 28.5%. Generating net profit is the main objective of when managing a company. It is determined by the cost of goods sold and revenues. A low net profit of 28.5% is nogood and can drive The Home Depot to bankruptcy. Management Discussion and Analysis 1. The management of risk and uncertainty is often included in the MD&A section comments. What do you learn of interest here? The company believes that payment card networks will probably make claims that include the incremental fraud claim losses and nonordinary course operating expenses that the payment card networks assert they have incurred. The costs will be related mostly to breach of data in the company networks and the establishment that the payment card data was noncompliant with the applicable data security standards thus resulting to losses as a result of the breach in the payment data. The losses as a result of the risk associated with data breach are material to the financial statements of the company. 2. Divisions and Product Lines may be discussed in the MD&A section. What cost accounting issues may arise in these areas as you consider our chapters for the week? The discussion of divisions and product lines in MDA gives rise to cost accounting issues. This includes the adoption of new merchandising assortment planning and pricing tools that enable the company make focused merchandizing decisions. The decisions include the mark down process of their products. Another cost accounting issue is the disciplined capital allocation. This means that the company only invested in products with a positive contribution margins. This ensured increase in shareholder value through higher returns on invested capital. 3. Management often explains higher or lowers than expected in their comments. Discuss the profitability and other comments in the MD&A section as they relate to our chapters thus on budgets, variance analysis, and management. The operating income for the company for 2014 increased by 14.2% to $10.5 billion from $9.2 in 2013. This shows the improved profitability of the company thus making it have a positive variance in relation to operating income. The net earnings of the company for the fiscal year ended February 2014 was $6.3 billion and diluted earnings per share of $4.71. MD&A; CSR; Contingencies; Liabilities 1.Costs and fluctuations are often discussed in the MD&A section. Any comments on your analysis here? Costs and fluctuations are discussed in the Management Discussions and Analysis section. Based on Form 10K of Home Depot Inc. the following costs and fluctuations were reported: Fiscal years 2014/2013 Net Sales for fiscal 2014 increased 5.5% to $83.2 billion from $78.8 billion for fiscal 2013. Gross Profit increased 5.7% to $29.0 billion for fiscal 2014 from $27.4 billion for fiscal 2013 Selling, General and Administrative expenses ("SG&A") increased 1.4% to $16.8 billion for fiscal 2014 from $16.6 billion for fiscal 2013.Depreciation and Amortization increased 1.5% to $1.7 billion for fiscal 2014 from $1.6 billion for fiscal 2013. Operating Income increased 14.2% to $10.5 billion for fiscal 2014 from $9.2 billion for fiscal 2013. In fiscal 2014, the company recognized $493 million of Interest and Other, net, compared to $699 million for fiscal 2013. The effective income tax rate was 36.4% for both fiscal 2014 and 2013. Diluted Earnings per Share were $4.71 for fiscal 2014 compared to $3.76 for fiscal 2013. Fiscal years 2013/2012 Net Sales for fiscal 2013 increased 5.4% to $78.8 billion from $74.8 billion for fiscal 2012. Gross Profit increased 6.0% to $27.4 billion for fiscal 2013 from $25.8 billion for fiscal 2012. SG&A increased 0.5% to $16.6 billion for fiscal 2013 from $16.5 billion for fiscal 2012. Depreciation and Amortization was $1.6 billion for both fiscal 2013 and 2012. Operating Income increased 18.0% to $9.2 billion for fiscal 2013 from $7.8 billion for fiscal 2012. In fiscal 2013, the company recognized $699 million of Interest and Other, net, compared to $545 million for fiscal 2012. The effective income tax rate was 36.4% for fiscal 2013 compared to 37.2% for fiscal 2012. Diluted Earnings per Share were $3.76 for fiscal 2013 compared to $3.00 for fiscal 2012. Based on these fluctuations, the company performed relatively well over 2012/2013 and 2013/2014. This is evident through the improvement in net sales, gross profit, operating income and diluted earnings per share. Costs have been well managed evidenced through very small percentage fluctuations over these years. 2. Pricing decisions often relate both to knowing your costs as well as to the strategy of pricing. Competition, loss leaders, and other elements may be discussed in the MD&A section. Emerging markets and product lines are also an issue for some companies. What do you learn from your review? Home Depot Inc. management has managed to consider various factors to develop their pricing strategy. They have taken consideration: The effects of fluctuating interest rates. The effects of fluctuating foreign currency exchange rate on the translation of foreign currency into US dollars. The effect of inflation, deflation and changing prices of commodities. Having all this in mind, the management has concluded that these effects have not had material effect on their financial condition. On the issue of tackling competition in the market, the company completed the rollout of a second generation FIRST phone which will provide a more intuitive Smartphone interface, internet access to convert online sales in the aisle, integrated mobile checkout and greatly improved overall processing speed. This will also create an emotional connection with customers.The company also produced a new range of innovative products to DoItForMe and DoItYourself customers. However, management disclosed that strong competition could adversely affect prices and demand for the company products and services and could decrease our market share. They also noted that that company may not timely identify or effectively respond to consumer needs, expectations or trends, which could adversely affect relationship with customers, reputation, the demand for products and services, and the market share of Home Depot Inc. (page 7) 3.Corporate Social Responsibility (CSR) and Sustainability relate to many issues including pollution and the cost of remediation and hazardous wastes. What do you learn about these topics from the SEC 10K? The company is also committed to Corporate Social Responsibility. The company has a Supplier Social and Environmental Responsibility Program designed to ensure that our suppliers adhere to the highest standards of social and environmental responsibility. This is meant to ensure that the company products are of high quality and they comply with applicable international, federal, state and local safety, quality and performance standards. Home Depot Inc. has Energy Saving Products and Programs. The company offers environmentally preferred products, which supports sustainability and helps customers save money, energy and water. Through Eco Options Program introduced in 2007, the company created product categories that allow consumers to easily identify products that meet specifications for energy efficiency, water conservation, healthy home, clean air and sustainable forestry. Through this program, the company sells products such as ENERGY STAR certified appliances, compact fluorescent light and light bulbs, tankless water heaters and other products, enabling customers to save on their utility bills. In fiscal 2014 the company helped consumers save over $630 million in electricity costs through sales of ENERGY STAR certified products as well as almost 48 billion gallons of water and over $400 million in water bills through the sales of WaterSenselabeled bath faucets, showerheads, aerators, toilets and irrigation controllers. Additionally, Home Depot Inc. has eliminated over 55 million pounds of volatile organic compound emissions since the beginning of fiscal 2012 through the end of fiscal 2014 as a result of converting all their consumer interior paints to "Low VOC" or "Zero VOC. The company has continued to use the Eco Options page on their website to reach consumers interested in environmentally responsible and costsaving products and projects. The site provides consumers with information on the benefits of environmentallypreferred Eco Options products through "green" blogs, articles and projects, featured Eco Options products and energy and water savings calculators to help consumers estimate potential savings by switching out their older, less efficient products with energy and watersaving models. The company also supports sustainability through their recycling efforts. They continue to offer nationwide, instore CFL bulb recycling program offered to customers free of charge and is available in all U.S. stores. 4. Contingencies and liabilities: can they be estimated? Are they probable to occur? What do you learn about your company in this area? How might cost issues including profitability relate to these topics for your company? Contingent liabilities are potential liabilities whose occurrence or nonoccurrence depends on future happenings. Contingent liabilities, which can be estimated : As at February 1, 2015, Home Depot Inc. was contingently liable to approximately $392 million arising from outstanding letters of credit and open accounts issued for certain business transactions, including insurance programs, trade contracts and construction contracts. Those contingent liabilities that cannot be estimated : Home Depot Inc is facing claims, litigation and government investigations regarding breach of payment data systems. There are at least 57 actions, which have been filed against the company in the US, and Canada and proceedings are in their early stages. These contingencies are probable and the company might be required to pay fines and other obligations to customers, shareholders and payment card issuing banks. However, the company cannot determine the exact estimates or range of estimates expected to be incurred. The effect of this on profitability is that the company profits are expected to decrease as a result of high legal costs and other professional services expenses associated with data breach