Please look at the other attached file, Financial Analysis Ratios from Chapter #17. Notice on the left side column of the Ratios page, the Ratios
Please look at the other attached file, "Financial Analysis Ratios from Chapter #17."Notice on the left side column of the Ratios page, the Ratios are separated by different Categories of Analysis.There are four (4) different Categories that I have underlined in RedColor.The four categories of financial analysis are: Liquidity and Efficiency, Solvency, Profitability and Market Prospects. Notice that the middle column of the Ratios page shows each Formula (or Ratio) and the Right hand column describes what each ratio/formula actually measures. Remember, your clients are interested in the Market Prospects of Home Depot stock as an Investment.
Therefore, which Ratios from the Financial Analysis Ratios from Chapter #17 (attached) can we calculate to determine the Market Prospects of our Home Depot Stock ?
Group of answer choices
A. The Current Ratio & The Debt Ratio.
B. Times Interest Earned & The Equity Ratio.
C. The Price-Earnings Ratio & the Dividend Yield Ratio.
D. None of These.
The attached 2019 Home Depot Annual Report (representing the 2018 Fiscal Year) has a Fiscal Year End of February 3rd, 2019.Remember in our Chapter on Financial Analysis (Chapter #17), we learned the importance of using Trend Analysis to make comparisons in financial data from year to year.See page #617 in your Accounting Textbook.If we were to look at the Annual Report on page #9/83, we see that the previous Fiscal Year (Fiscal Year 2017) had a year end date of January 28th, 2018.Thus, with these fiscal year end dates in mind, let's now consider the Price-Earnings Ratio as of each fiscal year end date of 01/28/18 and 02/03/19.By looking at your Financial Ratios sheet (attached above), we see the ratios under Market Prospects in the left hand column.Specifically, we are interested in the Price-Earnings Ratio, which is:
Market Price per Common Share/Earnings per Share.
We consult the historical stock prices and find that on01/28/18, the Market Price Per Common Share of Home Depot stock was $193.97/share.We also see on page #42/83 of the Annual Report that Basic Earnings per Share was $7.33/share on that date.Therefore, what is the Price-Earnings Ratio on 01/28/18 ?Please Round your answer to Two Decimal places.
Group of answer choices
A. $26.46/share.
B. $27.32/share.
C. $28.22/share.
D. None of These.
Now that we have determined the Price-Earnings Ratio at 01/28/18 (from Fiscal Year 2017) we need to calculate the analogous ratio for the fiscal 2018 year end date of 02/03/19 and make an accurate comparison to see how the Home Depot stock's Price-Earnings Ratio performed year over year.Again, we consult historical stock prices and find that Home Depot stock closed at $184.54/share on 02/03/19.According to page #42/83 of the Annual Report, we see Basic Earnings per Share was $9.78/share.Thus, what is the Price-Earnings Ratio on 02/03/19 and what does the Price-Earnings Ratio measure ?Use your Financial Ratios Ratios from Chapter #17 (attached).
Group of answer choices
A. $18.76/share. Price Earnings Ratio Measures Cash Return per Common Share.
B. $18.87/share. Price Earnings Ratio measures Market Value Relative to Earnings.
C. $16.85/share. Price Earnings Ratio measures overall profitability of Assets.
D. None of These.
Our Price-Earnings Ratio Comparison from FY 2017 to FY 2018:
By how much has the Home Depot's Price-Earnings Ratio Decreased from 2017 to 2018 on a Percentage Basis ?Remember:Consult the discussion on Trend Analysis in Chapter #17 of your Textbook to see how this comparison is made when using the Price-Earnings Ratio from FY 2017 as our Base Year when making our comparison to FY 2018.
Group of answer choices
A. (26.68%) or a 26.68% Decrease from FY 2017 to FY 2018.
B. (28.68%) or a 28.68% Decrease from FY 2017 to FY 2018.
C. The Price-Earnings Ratio did not Decrease.
D. None of these are True.
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