Refer to the financial statements of The Home Depot in Appendix A. (Note: Fiscal 2019 for The Home Depot runs from February 4, 2019, to February 2, 2020. As with many retail companies, The Home Depot labels the period Fiscal 2019 even though it ends in the 2020 calendar year. The label Fiscal 2019 is appropriate because Fiscal 2019 includes 11 months from the 2019 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?
2. What amount of income tax payments did The Home Depot make during the year ended February 2, 2020?
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$44 million
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$55 million
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$3,220 million
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$3,473 million
3. In the fiscal year ended February 2, 2020, The Home Depot generated $13,723 million from operating activities. Indicate where this cash was spent by listing the two largest cash outflows.
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Share Repurchase ($6,965 million) and Cash Dividends ($5,958 million)
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Share Repurchase ($6,965 million) and Capital Expenditures ($2,678 million)
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Long-Term Debt Repayments ($1,070 million) and Share Repurchase ($6,965 million)
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Net Earnings ($11,242 million) and Share Repurchase ($6,965 million)
APPENDIX A Excerpts from the Fiscal 2019 10-K Annual Report of The Home Depot, Inc. AZ THE HOME DEPOT, INC. Consolidated Balance Sheets February 2, 2020 "Fiscal 2019" February 3, 2019 "Fiscal 2018" $ 2,133 2,106 14,531 1,040 19,810 22,770 5,595 2.254 807 $ 51,236 $ 1,778 1,936 13,925 890 18,529 22,375 2.252 847 $ 44,003 in millions, except per share data ASSETS Current assets: Cash and cash equivalents Receivables, net Merchandise inventories Other current assets Total current assets Net property and equipment Operating lease right-of-use assets 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 debt Current operating lease liabilities Other accrued expenses Total current liabilities Long-term debt, excluding current installments Long-term operating lease liabilities Deferred income taxes Other long-term liabilities Total liabilities Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,786 shares at February 2, 2020 and 1,782 shares at February 3, 2019; outstanding: 1,077 shares at February 2, 2020 and 1,105 shares at February 3, 2019 Paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost, 709 shares at February 2, 2020 and 677 shares at February 3, 2019 Total stockholders' (deficit) equity Total liabilities and stockholders' equity $ 974 7,787 1,494 605 2,116 55 1,839 828 2,677 18,375 28,670 5,066 706 $ 1,339 7,755 1,506 656 1,782 11 1,056 2,611 16,716 26,807 1,535 491 1,867 45,881 54,352 89 10,578 89 11,001 51,729 (739) 46,423 (772) (65,196) (3,116) $ 51,236 (58,196) (1,878) $ 44,003 See accompanying notes to consolidated financial statements. A8 APPENDIX A Excerpts from the Fiscal 2019 10-K Annual Report of The Home Depot, Inc. THE HOME DEPOT, INC. Consolidated Statements Of Earnings Fiscal 2019 $110,225 72,653 37,572 Fiscal 2018 $108,203 71,043 37,160 Fiscal 2017 $100.904 66,548 34,356 19,740 1,989 17,864 1,811 19.513 1,870 247 21,630 15,530 21,729 15,843 19,675 14,681 in millions, except per share data NET SALES Cost of sales GROSS PROFIT Operating expenses: Selling, general and administrative Depreciation and amortization Impairment loss Total operating expenses OPERATING INCOME Interest and other (income) expense: Interest and investment income Interest expense Other Interest and other, net EARNINGS BEFORE PROVISION FOR INCOME TAXES Provision for income taxes NET EARNINGS Basic weighted average common shares BASIC EARNINGS PER SHARE Diluted weighted average common shares DILUTED EARNINGS PER SHARE (73) 1,201 (74) 1,057 1,128 14,715 3,473 $ 11,242 1,093 $ 10.29 1,097 $ 10.25 (93) 1,051 16 974 14,556 3,435 $ 11,121 1,137 S 9.78 1,143 $ 983 13,698 5,068 $ 8,630 1,178 $ 7.33 1,184 $ 7.29 9.73 Fiscal 2019 and fiscal 2017 include 52 weeks. Fiscal 2018 includes 53 weeks. See accompanying notes to consolidated financial statements. THE HOME DEPOT, INC. Consolidated Statements Of Comprehensive Income Fiscal 2019 Fiscal 2018 Fiscal 2017 $11,242 $11,121 $8,630 in millions Net earnings Other comprehensive income (loss): Foreign currency translation adjustments Cash flow hedges, net of tax Other Total other comprehensive income (loss) COMPREHENSIVE INCOME 53 8 (267) 53 8 (206) $10,915 311 (1) (9) 301 $8,931 64 $11,306 Fiscal 2019 and fiscal 2017 include 52 weeks. Fiscal 2018 includes 53 weeks. See accompanying notes to consolidated financial statements. APPENDIX A Excerpts from the Fiscal 2019 10-K Annual Report of The Home Depot, Inc. A9 THE HOME DEPOT, INC. Consolidated Statements Of Stockholders' Equity Fiscal 2019 Fiscal 2018 Fiscal 2017 89 $ 89 $ 88 1 89 89 89 10,578 172 10,192 104 282 10,578 9,787 132 273 10,192 251 11,001 35,519 in millions Common Stock: Balance at beginning of year Shares issued under employee stock plans Balance at end of year Paid-in Capital: Balance at beginning of year Shares issued under employee stock plans Stock-based compensation expense Balance at end of year Retained Earnings: Balance at beginning of year Cumulative effect of accounting changes Net earnings Cash dividends Other Balance at end of year Accumulated Other Comprehensive Income (Loss): Balance at beginning of year Cumulative effect of accounting changes Foreign currency translation adjustments Cash flow hedges, net of tax Other Balance at end of year Treasury Stock: Balance at beginning of year Repurchases of common stock Balance at end of year Total stockholders' (deficit) equity 46,423 26 11,242 (5,958) (4) 51,729 39,935 75 11,121 (4,704) (4) 46,423 8,630 (4,212) (2) 39,935 (566) (867) (772) (31) 53 (267) 53 8 311 (1) (9) (566) 8 3 (739) (772) (58,196) (7,000) (65,196) $ (3,116) (48,196) (10,000) (58,196) $ (1,878) (40,194) (8,002) (48,196) $ 1,454 Fiscal 2019 and fiscal 2017 include 52 weeks. Fiscal 2018 includes 53 weeks. See accompanying notes to consolidated financial statements. A10 APPENDIX A Excerpts from the Fiscal 2019 10-K Annual Report of The Home Depot, Inc. THE HOME DEPOT, INC. Consolidated Statements Of Cash Flows Fiscal 2019 Fiscal 2018 Fiscal 2017 $ 11,242 $ 11,121 $ 8,630 2,296 251 2,152 282 247 2,062 273 (170) (593) (135) 68 334 33 (1,244) (257) 743 80 (42) 26 (103) 13,038 139 (84) (10) 352 128 44 29 202 184 13,723 92 420 12,031 (2,678) in millions CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings Reconciliation of net earnings to net cash provided by operating activities: Depreciation and amortization Stock-based compensation expense Impairment loss Changes in receivables, net Changes in merchandise inventories Changes in other current assets Changes in accounts payable and accrued expenses Changes in deferred revenue Changes in income taxes payable Changes in deferred income taxes Other operating activities Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures Payments for businesses acquired, net Proceeds from sales of property and equipment Other investing activities Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: (Repayments of proceeds from short-term debt, net Proceeds from long-term debt, net of discounts and premiums Repayments of long-term debt Repurchases of common stock Proceeds from sales of common stock Cash dividends 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 equivalents at beginning of year Cash and cash equivalents at end of year SUPPLEMENTAL DISCLOSURES: Cash paid for income taxes Cash paid for interest, net of interest capitalized Non-cash capital expenditures 1989 37 (12) (2,653) (2,442) (21) 33 14 (2.416 (1,897) (374) 47 (4) (2,228) (365) 3,420 (1,070) (6,965) 280 (5,958) (176) (10,834) 236 119 1,778 $ 2,133 (220) 3,466 (1,209) (9,963) 236 (4,704) (26) (12,420) (1,798) (19) 3,595 $ 1,778 850 2,991 (543) (8,000) 255 (4,212) (211) (8,870) 933 124 2,538 $ 3,595 $ 3,220 1,112 136 $ 3,774 1,035 248 $ 4,732 991 150 Fiscal 2019 and fiscal 2017 include 52 weeks. Fiscal 2018 includes 53 weeks. See accompanying notes to consolidated financial statements
