- Recast the information in Consolidated Statements of changes in Financial position into a proper Cash Flow Statement (indirect method) for 1983-85**. Comment on the trends in cash from operating activities and also how Home Depot is financing its growth.
**The information in Consolidated Statements of changes in Financial position is sufficient to prepare the statement of cash flows. You do not have to prepare this from the Income Statements and Balance Sheet because of articulation issues.
Consolidated Statements of Changes in Financial Position February 2, 1986 Fiscal Year Ended February 3, 1985 January 29, 1984 $ 8,219,000 $ 14,122,000 $ 10,261,000 4,376,000 3,612,000 2,275,000 1,508,000 903,000 713,000 Sources of Working Capital: Net earnings Items which do not use working capital: Depreciation and amortization of property and equipment Deferred income taxes Amortization of cost in excess of the fair value of net assets required Net gain on disposition of property and equipment Other Working Capital Provided by Operations Proceeds from disposition of property and equipment Proceeds from long-term borrowings Proceeds from sale of common stock, net 637,000 93,000 (1,317,000) 180,000 77,000 15,707,000 18,075,000 9,469,000 861,000 92,400,000 120,350,000 659,000 814,000 $ 118,235,000 $140,100,000 59.000 11,936,000 3,000 4,200,000 36.663,000 $ 52,802.000 $ 99,767,000 10,399,000 $ 50,769,000 6,792,000 $ 16,081,000 52,000 Uses of Working Capital: Additions to property and equipment Current installments and repayments of long-term debt Acquisition of Bowater Home Center, Inc., net of working capital of $9,227,000 (note 2): Property and equipment Cost in excess of the fair value of net assets acquired Other assets, net of liabilities Other, net Increase in working capital 4,815,000 25,291,000 (913,000) 1,728,000 2,554,000 6,341,000 50.792,000 $ 118,235,000 $ 140,100,000 252,000 36.417,000 $ 52,802,000 Changes in components of Working Capital: Increase (decrease) in current assets: Cash Receivables, net Merchandise inventories Prepaid expenses (42,391,000) 15,799,000 68,654,000 587.000 42,649.000 $ 29,894,000 7,170,000 25,334,000 1.206,000 63,604,000 $ 13,917,000 1,567,000 41,137,000 227,000 56,848,000 Increase (decrease) in current liabilities: Accounts payable Accrued salaries and related expenses Other accrued expenses Income taxes payable Current portion of long-term debt 21,525,000 1,578,000 3,736,000 (626,000) 10,095,000 36,308,000 $ 6,341,000 10,505,000 (93,000) 2,824,000 (657,000) 233,000 12.812,000 $ 50,792.000 17,150,000 2,524,000 341,000 406,000 10.000 20,431,000 $ 36,417,000 Increase in Working Capital Consolidated Statements of Earnings January 29, 1984 (52 weeks) February 2, 1986 (52 weeks) $700,729,000 519,272,000 181,457,000 Fiscal Year Ended February 3, 1985 (53 weeks) $432,779,000 318.460,000 114.319,000 $256,184,000 186,170,000 70,014,000 Net Sales (note 2) Cost of Merchandise Sold Gross Profit Operating Expenses: Selling and store operating expenses Preopening expenses General and administrative expenses Total Operating Expenses Operating Income Other Income (Expense): Net gain on disposition of property and equipment (note 7) Interest income Interest expense (note 3) 134,354,000 7,521,000 20.555.000 162,430,000 19,027,000 74,447,000 1,917,000 12.817.000 89,181,000 25,138,000 43,514,000 2,456,000 7.376.000 53,346,000 16,668,000 1,317,000 Earnings Before Income Taxes Income Taxes (note 4) Net Earnings 1,481,000 (10.206,000) (7,408,000) 11,619,000 3,400,000 $ 8.219,000 5,236,000 (4,122,000) 1.114,000 26,252,000 12.130,000 $ 14,122,000 2,422,000 (104.000) 2.318,000 18,986,000 8,725,000 $10.261,000 $.33 $.56 $.41 Earnings per Common and Common Equivalent Share (note 5) 25,247,000 25,302,000 24,834,000 Weighted Average Number of Common and Common Equivalent Shares Consolidated Balance Sheets February 2, 1986 February 3, 1985 Assets: Current Assets: Cash, including time deposits of $43,374,000 in 1985 Accounts receivable, net (note 7) Refundable income taxes Merchandise inventories Prepaid expenses Total current assets $ 52,062,000 9,365,000 $ 9,671,000 21,505,000 3,659,000 152,700,000 2.526,000 190,061,000 84,046,000 1,939.000 147,412,000 Property and Equipment, at Cost (note 3): Land Buildings Furniture, fixtures, and equipment Leasehold improvements Construction in progress 44,396,000 38,005,000 34,786,000 23,748,000 27,694,000 168,629,000 7.813.000 160,816,000 30,044,000 3,728,000 18,162,000 11,743,000 14.039.000 77,716,000 4,139.000 73,577,000 Less accumulated depreciation and amortization Net property and equipment Cost in Excess of the Fair Value of Net Assets Acquired, net of accumulated amortization of $730,000 in 1985 and $93,000 in 1984 (note 2) 24,561,000 25,198,000 Other 4.755,000 3,177,000 $380,193,000 $249,364,000 (continued) Consolidated Balance Sheets (continued) February 2, 1986 February 3, 1985 Liabilities and Stockholders' Equity Current Liabilities: Accounts payable Accrued salaries and related expenses Other accrued expenses Income taxes payable (note 4) Current portion of long-term debt (note 3) Total current liabilities $53,881,000 5,397,000 13,950,000 $32,356,000 3,819,000 10,214,000 626,000 287.000 47,302,000 10.382.000 83.610.000 Long-Term Debt, Excluding Current Installments (note 3): Convertible subordinated debentures Other long-term debt 100,250,000 99,693.000 100,250,000 17,692,000 $199.943.000 $117.942.000 861,000 1,320,000 6,687,000 2,586,000 Other Liabilities Deferred Income Taxes (note 4) Stockholders' Equity (note 5) Common stock, par value $.05. Authorized: 50,000,000 shares; issued and outstanding25,150,063 shares at February 2, 1986 and 25,055,188 shares at February 3, 1985 Paid-in capital Retained earnings Total stockholders' equity 1,258,000 1,253,000 48,900,000 38.934.000 89,092,000 48,246,000 30.715.000 80,214.000 Commitments and Contingencies (notes 5, 6 and 8) $380,193,000 $249,364,000 Selected Financial Data February 2, 1986 February 3, 1985(1) Fiscal Year Ended January 29, 1984 January 30, 1983 January 31, 1982 $432,779,000 114,319,000 $256,184,000 70,014,000 $117,645,000 33,358,000 $51,542,000 14,735,000 Selected Consolidated Statement of Earnings Data: Net sales $700,729,000 Gross Profit 181,457,000 Earnings before income taxes and extraordinary item 11,619,000 Earnings before extraordinary item 8,219,000 Extraordinary item-reduction of income taxes arising from carryforward of prior years operating losses Net earnings $8,219,000 26,252,000 14,122,000 18,986,000 10,261,000 9,870,000 5,315,000 1,963,000 1,211,000 234,000 $1,445,000 $14,122,000 $10,261,000 $5,315,000 $.56 $.41 $.24 Per Common and Common Equivalent Share: Earnings before extraordinary item $.33 Extraordinary item Net earnings $.33 Weighted average number of common and common equivalent shares 25,247,000 $.06 01 $.07 $.56 $.41 $ 24 25,302,000 24,834,000 22,233,000 21,050,000 Selected Consolidated Balance Sheet Data: Working Capital $ 106,451,000 Total assets 380,193,000 Long-term debt 199,943,000 Stockholders' equity 89,092,000 $ 100,110,000 249,364,000 117,942,000 80,214,000 $ 49,318,000 105,230,000 4,384,000 65,278,000 $ 12,901,000 33,014,000 236,000 18,354,000 $ 5,502,000 16,906,000 3,738,000 5,024,000 (1) 53 week fiscal year, all others were 52 week fiscal years. Consolidated Statements of Changes in Financial Position February 2, 1986 Fiscal Year Ended February 3, 1985 January 29, 1984 $ 8,219,000 $ 14,122,000 $ 10,261,000 4,376,000 3,612,000 2,275,000 1,508,000 903,000 713,000 Sources of Working Capital: Net earnings Items which do not use working capital: Depreciation and amortization of property and equipment Deferred income taxes Amortization of cost in excess of the fair value of net assets required Net gain on disposition of property and equipment Other Working Capital Provided by Operations Proceeds from disposition of property and equipment Proceeds from long-term borrowings Proceeds from sale of common stock, net 637,000 93,000 (1,317,000) 180,000 77,000 15,707,000 18,075,000 9,469,000 861,000 92,400,000 120,350,000 659,000 814,000 $ 118,235,000 $140,100,000 59.000 11,936,000 3,000 4,200,000 36.663,000 $ 52,802.000 $ 99,767,000 10,399,000 $ 50,769,000 6,792,000 $ 16,081,000 52,000 Uses of Working Capital: Additions to property and equipment Current installments and repayments of long-term debt Acquisition of Bowater Home Center, Inc., net of working capital of $9,227,000 (note 2): Property and equipment Cost in excess of the fair value of net assets acquired Other assets, net of liabilities Other, net Increase in working capital 4,815,000 25,291,000 (913,000) 1,728,000 2,554,000 6,341,000 50.792,000 $ 118,235,000 $ 140,100,000 252,000 36.417,000 $ 52,802,000 Changes in components of Working Capital: Increase (decrease) in current assets: Cash Receivables, net Merchandise inventories Prepaid expenses (42,391,000) 15,799,000 68,654,000 587.000 42,649.000 $ 29,894,000 7,170,000 25,334,000 1.206,000 63,604,000 $ 13,917,000 1,567,000 41,137,000 227,000 56,848,000 Increase (decrease) in current liabilities: Accounts payable Accrued salaries and related expenses Other accrued expenses Income taxes payable Current portion of long-term debt 21,525,000 1,578,000 3,736,000 (626,000) 10,095,000 36,308,000 $ 6,341,000 10,505,000 (93,000) 2,824,000 (657,000) 233,000 12.812,000 $ 50,792.000 17,150,000 2,524,000 341,000 406,000 10.000 20,431,000 $ 36,417,000 Increase in Working Capital Consolidated Statements of Earnings January 29, 1984 (52 weeks) February 2, 1986 (52 weeks) $700,729,000 519,272,000 181,457,000 Fiscal Year Ended February 3, 1985 (53 weeks) $432,779,000 318.460,000 114.319,000 $256,184,000 186,170,000 70,014,000 Net Sales (note 2) Cost of Merchandise Sold Gross Profit Operating Expenses: Selling and store operating expenses Preopening expenses General and administrative expenses Total Operating Expenses Operating Income Other Income (Expense): Net gain on disposition of property and equipment (note 7) Interest income Interest expense (note 3) 134,354,000 7,521,000 20.555.000 162,430,000 19,027,000 74,447,000 1,917,000 12.817.000 89,181,000 25,138,000 43,514,000 2,456,000 7.376.000 53,346,000 16,668,000 1,317,000 Earnings Before Income Taxes Income Taxes (note 4) Net Earnings 1,481,000 (10.206,000) (7,408,000) 11,619,000 3,400,000 $ 8.219,000 5,236,000 (4,122,000) 1.114,000 26,252,000 12.130,000 $ 14,122,000 2,422,000 (104.000) 2.318,000 18,986,000 8,725,000 $10.261,000 $.33 $.56 $.41 Earnings per Common and Common Equivalent Share (note 5) 25,247,000 25,302,000 24,834,000 Weighted Average Number of Common and Common Equivalent Shares Consolidated Balance Sheets February 2, 1986 February 3, 1985 Assets: Current Assets: Cash, including time deposits of $43,374,000 in 1985 Accounts receivable, net (note 7) Refundable income taxes Merchandise inventories Prepaid expenses Total current assets $ 52,062,000 9,365,000 $ 9,671,000 21,505,000 3,659,000 152,700,000 2.526,000 190,061,000 84,046,000 1,939.000 147,412,000 Property and Equipment, at Cost (note 3): Land Buildings Furniture, fixtures, and equipment Leasehold improvements Construction in progress 44,396,000 38,005,000 34,786,000 23,748,000 27,694,000 168,629,000 7.813.000 160,816,000 30,044,000 3,728,000 18,162,000 11,743,000 14.039.000 77,716,000 4,139.000 73,577,000 Less accumulated depreciation and amortization Net property and equipment Cost in Excess of the Fair Value of Net Assets Acquired, net of accumulated amortization of $730,000 in 1985 and $93,000 in 1984 (note 2) 24,561,000 25,198,000 Other 4.755,000 3,177,000 $380,193,000 $249,364,000 (continued) Consolidated Balance Sheets (continued) February 2, 1986 February 3, 1985 Liabilities and Stockholders' Equity Current Liabilities: Accounts payable Accrued salaries and related expenses Other accrued expenses Income taxes payable (note 4) Current portion of long-term debt (note 3) Total current liabilities $53,881,000 5,397,000 13,950,000 $32,356,000 3,819,000 10,214,000 626,000 287.000 47,302,000 10.382.000 83.610.000 Long-Term Debt, Excluding Current Installments (note 3): Convertible subordinated debentures Other long-term debt 100,250,000 99,693.000 100,250,000 17,692,000 $199.943.000 $117.942.000 861,000 1,320,000 6,687,000 2,586,000 Other Liabilities Deferred Income Taxes (note 4) Stockholders' Equity (note 5) Common stock, par value $.05. Authorized: 50,000,000 shares; issued and outstanding25,150,063 shares at February 2, 1986 and 25,055,188 shares at February 3, 1985 Paid-in capital Retained earnings Total stockholders' equity 1,258,000 1,253,000 48,900,000 38.934.000 89,092,000 48,246,000 30.715.000 80,214.000 Commitments and Contingencies (notes 5, 6 and 8) $380,193,000 $249,364,000 Selected Financial Data February 2, 1986 February 3, 1985(1) Fiscal Year Ended January 29, 1984 January 30, 1983 January 31, 1982 $432,779,000 114,319,000 $256,184,000 70,014,000 $117,645,000 33,358,000 $51,542,000 14,735,000 Selected Consolidated Statement of Earnings Data: Net sales $700,729,000 Gross Profit 181,457,000 Earnings before income taxes and extraordinary item 11,619,000 Earnings before extraordinary item 8,219,000 Extraordinary item-reduction of income taxes arising from carryforward of prior years operating losses Net earnings $8,219,000 26,252,000 14,122,000 18,986,000 10,261,000 9,870,000 5,315,000 1,963,000 1,211,000 234,000 $1,445,000 $14,122,000 $10,261,000 $5,315,000 $.56 $.41 $.24 Per Common and Common Equivalent Share: Earnings before extraordinary item $.33 Extraordinary item Net earnings $.33 Weighted average number of common and common equivalent shares 25,247,000 $.06 01 $.07 $.56 $.41 $ 24 25,302,000 24,834,000 22,233,000 21,050,000 Selected Consolidated Balance Sheet Data: Working Capital $ 106,451,000 Total assets 380,193,000 Long-term debt 199,943,000 Stockholders' equity 89,092,000 $ 100,110,000 249,364,000 117,942,000 80,214,000 $ 49,318,000 105,230,000 4,384,000 65,278,000 $ 12,901,000 33,014,000 236,000 18,354,000 $ 5,502,000 16,906,000 3,738,000 5,024,000 (1) 53 week fiscal year, all others were 52 week fiscal years
