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please help on questions A-J Presented below are the income statements and balance sheets for The Home Depot, Inc. (HD) for 2021 and 2020. Additional
please help on questions A-J
Presented below are the income statements and balance sheets for The Home Depot, Inc. (HD) for 2021 and 2020. Additional financial information is found below the financial statements. Using this information, calculate the financial metrics found following the information. The Home Depot, Inc. Income Statement For Years Ended December 31 (All numbers in millions) Tax rate in 2020 was 24.2%. The Home Depot, Inc. Balance Sheet December 31 (All numbers are in millions) Assets Current assets \begin{tabular}{lrr} Cash & $3,600 & $8,800 \\ Receivables & 3,400 & 3,000 \\ Inventory & 22,100 & 16,700 \\ \cline { 2 - 3 } Total current assets & 29,100 & 28,500 \\ Property, plant, and equipment & 42,800 & 42,100 \\ Total assets & $71,900 & $70,600 \\ Debt and Stockholders' Equity & & \\ Current debt & & \\ Accts. payable & $13,500 & $11,600 \\ Notes payable & 8,900 & 6,100 \\ Accruals & 6,300 & 5,500 \\ Total current debt & 28,700 & 23,200 \\ & & \\ Long-term debt & 40,900 & 44,100 \\ \hline Total debt & 69,600 & 67,300 \\ Stockholders' equity & & \\ Capital stock & 14,500 & 11,000 \\ Treasury stock & 80,800 & 65,800 \\ Retained earnings & 68,600 & 58,100 \\ \hline \end{tabular} Additional Information: 1. Home Depot has 1,030,000,000 shares of common stock outstanding. The market value per share is $285.00. 2. Home Depot's cost of money is 7%. 3. Cash dividends per share were expected to be $7.00. 4. The industry average for the current ratio is 1.60. 5. The industry average for the quick ratio is 91 . 6. The industry average for the inventory holding period is 77 days. 7. The industry average for the receivables holding period is 8 days. 8. The industry average for the debt-equity ratio is .61. 9. The industry average for the times interest earned ratio is 10.4. 10. The industry average for the net profit margin is .026. 11. The industry average for the total asset tumover is .85. 12. The industry average for the equity multiplier is 1.61. 13. The industry average for the return on equity is .036. Required: All calculations need to be in context of figures provided above. (8 pts.) a). Calculate the 2021 DuPont identity and discuss what the DuPont Identity reveals. Return of equity= profit margin "total asset turnover" leverage factor .036=.026.851 (6 pts.) b). Calculate the inventory-holding period and the receivables holding period for 2021. Discuss what these two metrics indicate. (6 pts.) c). Calculate the current ratio and the quick ratio for 2021. Discuss what these ratios indicate. (6 pts.) d). Calculate the debt to equity ratio and the times interest earned ratio for 2021 . Discuss what these ratios indicate. (9 pts.) e). Calculate the free cash flow for 2021. What is the significance of free cash flow? (5 pts.) f). Calculate MVA for 2021. Explain what MVA indicates. (6 pts.) g). Calculate EVA for 2021. Explain what EVA indicates. (3 pts.) h). Calculate the earnings per share for 2021 . What does the earnings per share indicate? (3 pts.) i). Calculate the price earnings (P/E) ratio for 2021 . What does this financial metric indicate? (3 pts.) j). Calculate the dividend yield ratio for 2021 . What does this financial metric indicate? Presented below are the income statements and balance sheets for The Home Depot, Inc. (HD) for 2021 and 2020. Additional financial information is found below the financial statements. Using this information, calculate the financial metrics found following the information. The Home Depot, Inc. Income Statement For Years Ended December 31 (All numbers in millions) Tax rate in 2020 was 24.2%. The Home Depot, Inc. Balance Sheet December 31 (All numbers are in millions) Assets Current assets \begin{tabular}{lrr} Cash & $3,600 & $8,800 \\ Receivables & 3,400 & 3,000 \\ Inventory & 22,100 & 16,700 \\ \cline { 2 - 3 } Total current assets & 29,100 & 28,500 \\ Property, plant, and equipment & 42,800 & 42,100 \\ Total assets & $71,900 & $70,600 \\ Debt and Stockholders' Equity & & \\ Current debt & & \\ Accts. payable & $13,500 & $11,600 \\ Notes payable & 8,900 & 6,100 \\ Accruals & 6,300 & 5,500 \\ Total current debt & 28,700 & 23,200 \\ & & \\ Long-term debt & 40,900 & 44,100 \\ \hline Total debt & 69,600 & 67,300 \\ Stockholders' equity & & \\ Capital stock & 14,500 & 11,000 \\ Treasury stock & 80,800 & 65,800 \\ Retained earnings & 68,600 & 58,100 \\ \hline \end{tabular} Additional Information: 1. Home Depot has 1,030,000,000 shares of common stock outstanding. The market value per share is $285.00. 2. Home Depot's cost of money is 7%. 3. Cash dividends per share were expected to be $7.00. 4. The industry average for the current ratio is 1.60. 5. The industry average for the quick ratio is 91 . 6. The industry average for the inventory holding period is 77 days. 7. The industry average for the receivables holding period is 8 days. 8. The industry average for the debt-equity ratio is .61. 9. The industry average for the times interest earned ratio is 10.4. 10. The industry average for the net profit margin is .026. 11. The industry average for the total asset tumover is .85. 12. The industry average for the equity multiplier is 1.61. 13. The industry average for the return on equity is .036. Required: All calculations need to be in context of figures provided above. (8 pts.) a). Calculate the 2021 DuPont identity and discuss what the DuPont Identity reveals. Return of equity= profit margin "total asset turnover" leverage factor .036=.026.851 (6 pts.) b). Calculate the inventory-holding period and the receivables holding period for 2021. Discuss what these two metrics indicate. (6 pts.) c). Calculate the current ratio and the quick ratio for 2021. Discuss what these ratios indicate. (6 pts.) d). Calculate the debt to equity ratio and the times interest earned ratio for 2021 . Discuss what these ratios indicate. (9 pts.) e). Calculate the free cash flow for 2021. What is the significance of free cash flow? (5 pts.) f). Calculate MVA for 2021. Explain what MVA indicates. (6 pts.) g). Calculate EVA for 2021. Explain what EVA indicates. (3 pts.) h). Calculate the earnings per share for 2021 . What does the earnings per share indicate? (3 pts.) i). Calculate the price earnings (P/E) ratio for 2021 . What does this financial metric indicate? (3 pts.) j). Calculate the dividend yield ratio for 2021 . What does this financial metric indicate Step by Step Solution
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