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Refer to the financial statements of The Home Depot in Appendix A. (Note: Fiscal 2016 for The Home Depot runs from February 1, 2016, to

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedRefer to the financial statements of The Home Depot in Appendix A. (Note: Fiscal 2016 for The Home Depot runs from February 1, 2016, to January 29, 2017. As with many retail companies, The Home Depot labels the period Fiscal 2016 even though it ends in the 2017 calendar year. The label Fiscal 2016 is appropriate because Fiscal 2016 includes 11 months from the 2016 calendar year. The Home Depot explains its choice of fiscal period in Note 1 to its financial statements.)

Required:

1. Which of the two basic reporting approaches for the cash flows from operating activities did The Home Depot use?

A-Direct

B-Indirect

2. What amount of income tax payments did The Home Depot make during the year ended January 29, 2017?

A-$639 million

B-$12 million

C-$4,623 million

D-$3,082 million

3. In the fiscal year ended January 29, 2017, The Home Depot generated $9,783 million from operating activities. Indicate where this cash was spent by listing the two largest cash outflows.

A-Share Repurchase ($7,000 million) and Cash Dividends ($3,404 million)

B-Long-Term Debt Repayments ($3,045 million) and Share Repurchase ($6,880 million)

C-Cash Dividends ($3,404 million) and Share Repurchase ($6,880 million)

D-Share Repurchase ($6,880 million) and Capital Expenditures ($1,621 million)

APPENDIX A Excerpts from the Fiscal 2016 Annual Report of The Home Depok, Inc. THE HOME DEPOT, INC. AND SUBSIDIARIES Consolidated Balance Sheets January 29, 2017 January 31, 2016 Fiscal 2013 S 2.538 2,029 12,549 $ 2.216 1890 11,809 17,724 40,436 18,512 21.914 16.484 39.266 17.015 22.191 2.100 1.196 541,973 1,235 S42,966 $ $ 710 7.000 1,484 350 6.565 1.515 1.689 1.566 amounts ir millions, except Share and per share data ASSETS Current Assets: Cash and Cash Equivalents Receivables, net Merchandise Inventories Other Current Assets Tocal Current Assets Property and Equipment, at cost Less Accumulated Depreciation and Amortization Net Property and Equipment Goodwill Other Assets Total Assets LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Short-Term Debt Accounts Payable Accrued Salaries and Related Expenses Sales Taxes Payable Deferred Revenue Income Taxes Payable Current Installments of Long-Term Debe Other Accrued Expenses Total Current Liabilities Long-Term Debl. excluding current installments Other Long-Term Liabilities Deferred Income Taxes Tocal Liabilities STOCKHOLDERS' EQUITY Comm Stock, ur value $0.05 Buthorized: 10 billion shares: issued: 1.776 billion shares at January 29, 2017 and 1.772 billion shares at January 31, 2016, outstanding: 1.200 billion shares at January 29, 2017 and 1.252 billion shares at January 31, 2016 Paid-in Capital Retained Emin Accumulated Other Comprehensive Loss Treasury Stock, at cost, 573 million shares at January 29, 2017 and 520 million shares at January 31, 2016 Total Stockholders' Equity Total Liabilities and Stockholders' Equity See accompanying No C ode Financial Statements 542 2,195 14,133 22.349 1.855 39*****22911 1.941 12.574 20.789 1.965 2233 35,657 9,787 35,519 (867) 30.973 (898) (33,194) (40,194) 4,333 S42,966 $41973 APPENDIX A cerpes from the Facal 2016 Anual Report of The Home Depotne THE HOME DEPOT, INC. AND SUBSIDIARIES Consolidated States of Earnings Fiscal Year Ended Jan 31, 2016 Fiscal 2015 Feb. 1. 2015 "Fiscal 2014 m SR 519 S1176 20.265 161 18491 11.774 Jan. 29, 2017 i s million share date "Fiscal 2016 NET SALES $94.595 Con of Sales GROSS PROFIT 32313 Operating Expenses Selling, General and Administrative 17,132 Depreciation and Amortization 1.754 Total Operating Expenses 1R AS6 OPERATING INCOME 13,427 Interest and Other Income) Expenses Interest and Investment Income (36) Interest Expertise Interest and Othernet EARNINGS BEFORE PROVISION FOR INCOME TAXES 12.491 Provision for Income Taxes 4.534 NET EARNINGS $ 7,957 Weighted Average Common Shares 1.229 HASIC KARNINGS PER SHARE $ 647 Diluted Weighted Average Common Shares 1,234 DILUTED EARNINGS PER SHARE $ 6.45 (1) Facal d r y 29, 2017, Jay J, 2016, und Forwary 1, 2015 include 52 weeks. on Sant (166) 11124387119921993 199999999999995 11,021 4.012 $ 7,009 1.277 54.74 55.49 1,283 $5.46 S4.71 S THE HOME DEPOT, INC. AND SUBSIDIARIES Consolidated Statements of Comgresive Income in million Jan. 29, 2017 "Fiscal 2016 Fiscal Year Ended Jan 31, 2016 Fiscal 2015 Feb 1, 2015 Fiscal 2010 $7.957 $7.000 (412 (510) Net Farnings Other Comprehensive Income (Less) Foreign Currency Translation Adjustments Cash Flow Hedge of tax Other Total Other Comprehensive Income (Loss) COMPREHENSIVE INCOME APPENDIX A Excerpts from the scal 2016 Anual Report of The Home Depot Inc. THE HOME DEPOT, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity Accumulated Other Common Stock Puld In Retained Comprehensive Shares Amount Capital Earnings Income (Loss) 1,76188 $8,402 S23,180 S46 6145 Treasury Stock Shares Amo $(19,194) Stockholders Equity $12.522 6 145 7 122 amounts in millions, except pur share data Balance, February 2, 2014 Net Earnings Shares Issued Under Employee Stock Mans Tax Frect of Stock-Based Compensation Foreign Currency Translation Adjustments Cash Flow Hedges, net of tax Stock Options Awards and Amortization of Restricted Stack Repurchases of Common Stock Cash Dividends ($1.88 per share) (510) IIIIIII 225 (7.000) (2.530) Other 4.194) 7.009 145 (412) (34) 244 (7.000) (7.000) (3,031) $ 6,316 Balance, February 1, 2015 Net Earnings Shares Issued Under Employee Stock Plans Tax Effect of Stock Based Compensation Foreign Currency Translation Adjustments - Cash Flow Hedges, net of tax Stock Options Awards and Amortization of Restricted Stock Repurchases of Common Stock Cash Dividends (52.36 per share) Halance, January 31, 2016 Net Earnings Shares Issued Under Employee Stock Mans Tax Effect of Stock Based Compensation Foreign Currency Translation Adjustments - Cash Flow Hedges, net of tax Stock Options Awards and Amortization of Restricted Stock Repurchases of Common Stock Cash Dividends ($2.76 per share) Other Halance, January 29, 2017 1,776 See Corp Moses o Consolidated Financial Statements 7.957 III (53) (7,000) (7.000) (3,404) 1,76 six See 39,787 s8551 SIRET $(867) (573) S40,194) S 4.333 THE HOME DEPOT, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Jan. 29, 2017 "Fical 2016 Pecal Year Ended Jan. 31, 2016 Fiscal 2015 Feb. 1. 2015 "Fiscal 2014 $7.957 $2009 5615 1,973 1,786 1.863 244 (323) (138) (181) (546) (769) (81) (124) (199) 244 (5) 888 100 105 109 154 9,783 (33) 9,373 3,242 (1,621) (1,503) (1.442) CASH FLOWS FROM OPERATING ACTIVITIES: Netings Reconciliation of Net Earnings to Net Cash Provided by Operating Activities Depreciation and Amortization Stack Based Compensation Expense Gain on Sales of Investments Changes in Assets and Liabilities, net of the effects of acquisitions: Receivables.net Merchandise Inventories Other Current Assets Accounts Payable and Accrued Expenses Deferred Revenue Income Taxes Payable Deferred Income Taxes Other Net Cash Provided by Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES: Capital Expenditures, net of $179, $165 and $217 of non-cash capital expenditures in fiscal 2016, 2015 and 2014, respectively Proceeds from Sales of Investments Payments for Businesses Acquired, net Proceeds from Sales of Property and Equipment Net Cash Used in Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Short-Term Borrowings, net Proceeds from Long-Term Borrowings, net of discount Repayments of Long Term Debt Repurchases of Common Stock Proceeds from Sales of Common Stock Cash Dividends Paid to Stockholders Other Financing Activities Net Cash Used in Financing Activities Change in Cash and Cash Equivalents Effect of Exchange Rate Changes on Cash and Cash Equivalents Cash and Cash E vents Beginning of Year Cash and Cash Equivalents at End of Year SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS MADE FOR: Interest, net of interest capitalized Income Taxes 144 (200) (1.583) (2.982) 1.220 3.991 1.981 4.959 0,045) (6,880) (39) (19) (7.000) 228 (3,031) (7.000 252 (2.530) (3,404) 05 (7,870 (5,787 (100) (106 (111) 2,216 52338 $2.216 $1,723 S 874 53.853 $ S1415 S423

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