Part 1:A. Create a horizontal analysis of each item on the balance sheet and income statement comparing the last two years. (2018 and 2019) B. Create a vertical analysis of each item on the last two years of the income statement and balance sheet. (2018 and 2019) Part 2: A. Calculate free cash flow for Home Depot for the two most recent reported years. (2018 and 2019)B. Interpret the results of your calculations in a short paragraph. Part 3: A. Based on your vertical and horizontal analysis from part 1, provide a brief analysis of accounts receivable for Home Depot. B. Calculate the receivables turnover ratio and days-in-receivable ratio for the most current year for Home Depot. Show your calculations. Comment briefly on what your ratio tells you. (Assume all sales are credit sales and use net sales in the ratio). C. Refer to the notes to the financial statements and briefly discuss why Home Depot does not report an allowance for account receivable. Then refer to the allowance as a valuation reserve. Then also refer to the word material. Make sure to understand what materiality means.

Fiscal Fiscal amounts in millions, except per share data or where noted 2019 2010 STATEMENT OF EARNINGS DATA Net sales ($) 110.225 108.203 Net sales increase (%) 1.9 7.2 Earnings before provision for Income taxes ($) 14.715 14.556 Net earnings ($) 11,242 11.121 Net earnings increase (%) 1.1 28.9 Diluted earnings per share ($) 10.25 9.73 Diluted earnings per share Increase (%) 5.3 33.5 Diluted weighted average number of common shares 1.097 1,143 Gross profit - % of sales 34.1 34.3 Total operating expenses - % of sales 19.7 20.0 Net earnings - % of sales 10.2 10.3 BALANCE SHEET DATA AND FINANCIAL RATIOS Total assets ($) 51,236 44,003 Working capital ($) 1.435 1.813 Merchandise inventories ($) 14.531 13.925 Net property and equipment (S) (") 22,770 22,375 Long-term debt, excluding current installments ($) 28,670 26,807 Stockholders' (deficit) equity ($) (3,116) (1,878) Total debt-to-equity (%) (1.010.4) (1,555.0) Inventory turnover 4.9x 5.1x STATEMENT OF CASH FLOWS DATA Depreciation and amortization ($) 2,296 2.152 Capital expenditures (S) 2.678 2.442 OTHER METRICS Return on invested capital (%) 45.4 44.8 Cash dividends per share ($) 5.44 4.12 Number of stores 2,291 2.287 Retail square footage at fiscal year-end 238 238 Comparable sales increase (%) 3.5 5.2 Sales per retail square foot (S) 454.82 446.86 Customer transactions 1.616 1.621 Average ticket ($) 67.30 65.74 Number of associates at fiscal year end (in thousands) 415 413 Note: Fiscal 2018 includes 53 weeks. All other fiscal periods disclosed include 52 weeks. This information s MD&A and our consolidated financial statements and related notes. (1) Includes finance leases (2) The calculations for fiscal 2017. fiscal 2016, and fiscal 2015 do not include results for Interline. which w (3) These amounts do not include the results for Interline, which was acquired in fiscal 2015. (4) Fiscal 2019 compares the 52 week period in fiscal 2019 to weeks 2 through 53 in fiscal 2018. Fiscal 20 from the 53" week of fiscal 2018 and compare weeks 1 through 52 in fiscal 2018 to the 52 week period