Question 12 2 pts

Home Depot is a Merchandiser.Of course, this means they do not manufacture their products themselves.Instead, Home Depot buys finished products (as Inventory) from their Vendors and sells this Inventory for a profit to Home Depot customers in their stores and via their online sales platform.You studied merchandising in Chapter #5 in your ACC 111 Course.Thus, we need to consider typical financial analysis related to merchandising that is essential to include for our clients that are looking to buy Home Depot Stock.

An excellent choice for the financial analysis of a Merchandiser is Inventory Turnover.How is the Ratio for Inventory Turnover calculated and How is it defined ?

Group of answer choices

A. Inventory Turnover = Cost of Goods Sold/Average Inventory.

B. Inventory Turnover = Ending Inventory/Cost of Goods Sold x 365

C. Inventory Turnover measures how long a company holds inventory before selling it.

D. Inventory Turnover measures the Liquidity of Inventory.

E. A & C are True.

F. B & D are True.

Flag this Question Question 13 2 pts

Following Question #12 on Inventory Turnover:What is the Inventory Turnover calculated for the Home Depot for their FY 2018, as of their year end on 02/03/19 ?Consult the Consolidated Balance Sheets for FY 2017 and FY 2018 on page #41/83 and the Consolidated Statement of Earnings on page #42/83 of the attached Home Depot Annual Report.Remember: To calculate Inventory turnover, one of the two numbers we need is Cost of Goods Sold.In the Home Depot annual report, Cost of Goods Sold is also known as "Cost of Sales" found on page #42/83 in the Annual Report.Please round your answer to two decimal places.

Group of answer choices

A. 5.33 Times.

B. 5.21 Times.

5.41 Times.

D. None of These.

Flag this Question Question 14 2 pts

Finally, let's consider the financial analysis category of Profitability.What is the Profit Margin Ratio for Home Depot in FY 2017 and FY 2018 ?By how much has the company's profit margin ratio increased or decreased from FY 2017 to FY 2018?Please note that Home Depot produces a Consolidated Statement of Net Earnings (Not a Consolidated Statement of Net Income).Thus, Home Depot uses the term "Net Earnings" rather than "Net Income."Please round your answer to two decimal places.

Group of answer choices

A. Profit Margin is 10.28% in FY 2017 and 8.55% in FY 2018.

B. Profit Margin is 10.76% in FY 2017 vs. 9.82% in FY 2018.

C. Profit Margin is 8.55% in FY 2017 and 10.28% for FY 2018.

D. Profit Margin Increased by 20.2% from FY 2017 to FY 2018.

E. C & D are True.

F. A & D are True.