Review the attached Home Depot ratio analysis. Analyze the results by focusing on the major categories of ratios, including liquidity, debt, profitability, asset management, and market, as well as, interpreting the financial performance of the company by use of the DuPont Identity.

Home Depot Inc (NYS: HD) 2 Exchange rate used is that of the Year End 3 reported date 5 6 As Reported Annual Balance Sheet 7 Report Date 01/29/2017 01/31/2016 02/01/2015 02/02/2014 02/03/2013 8 Currency USD USD USD USD USD 9 Audit Status Not Qualified Not Qualified Not Qualified Not Qualified Not Qualified 10 Consolidated Yes Yes Yes Yes Yes 11 Scale Thousands Thousands Thousands Thousands Thousands 12 Cash & cash equivalents 2538000 5.91% 2216000 5.21% 1723000 4.31% 1929000 4.76% 2494000 6.07% 13 Receivables, net 2029000 4.72% 1890000 4.44% 1484000 3.72% 1398000 3.45% 1395000 3.40% 14 Merchandise inventories 12549000 29.21% 11809000 27.75% 1 1079000 27.73% 1 1057000 27.29% 0710000 26.07% 15 Other current assets 608000 1.42% 1078000 2.53% 1016000 2.54% 5000 2.21% 773000 1.88% 16 Total current assets 17724000 41.25% 16993000 39.94% 15302000 38.31% 5279000 37.71% 15372000 37.42% 17 Land 8207000 19.10% 8149000 19.15% 8243000 20.64% 8375000 20.67% 8485000 20.65% 18 Buildings 17772000 41.36% 17667000 41.52% 17759000 44.46% 17950000 44.30% 17981000 43.77% 19 Furniture, fixtures & equipment 1 1020000 25.65% 10279000 24.16% 9602000 24.04% 10107000 24.94% 9338000 22.73% 20 Leasehold improvements 1519000 3.54% 1481000 3.48% 1419000 3.55% 1388000 3.43% 1382000 3.36% 21 Construction in progress 739000 1.72% 670000 1.57% 585000 1.46% 548000 1.35% 647000 1.57% 22 Capital leases 1169000 2.72% 1020000 2.40% 905000 2.27% 696000 1.72% 658000 1.60% 23 Property & equipment, at cost 40426000 94.09% 39266000 92.28% 38513000 96.41% 39064000 96.41% 38491000 93.69% 24 Less: accumulated depreciation & amortization 18512000 43.09% 17075000 40.13% 15793000 39.54% 15716000 38.79% 14422000 35.10% 25 Net property & equipment 21914000 51.00% 22191000 52. 15% 22720000 56.88% 23348000 57.62% 24069000 58.58% 26 Notes receivable 140000 0.34% 27 Goodwill 2093000 4.87% 2102000 4.94% 1353000 3.39% 1289000 3.18% 1170000 2.85% 28 Other assets 1235000 2.87% 1263000 2.97% 571000 1.43% 602000 1.49% 333000 0.81% 29 Total assets 42966000 100.00% 42549000 100.00% 39946000 100.00% 40518000 100.00% 41084000 100.00% 30 Short-term debt 710000 1.65% 350000 0.82% 290000 0.73% 31 Accounts payable 7000000 16.29% 6565000 15.43% 5807000 14.54% 5797000 14.31% 5376000 13.09% 32 Accrued salaries & related expenses 1484000 3.45% 1515000 3.56% 1391000 3.48% 1428000 3.52% 1414000 3.44% 33 Sales taxes payable 508000 1.18% 476000 1.12% 434000 1.09% 396000 0.98% 472000 1.15% 34 Deferred revenue 1669000 3.88% 1566000 3.68% 1468000 3.67% 1337000 3.30% 1270000 3.09% 35 Income taxes payable 25000 0.06% 34000 0.08% 35000 0.09% 12000 0.03% 22000 0.05% 36 Current installments of long-term debt 542000 1.26% 77000 0.18% 38000 0.10% 33000 0.08% 1321000 3.22% 37 Other accrued expenses 2195000 5.11% 1943000 4.57% 1806000 4.52% 1746000 4.31% 1587000 3.86% 38 Total current liabilities 14133000 32.89% 12526000 29.44% 11269000 28.21% 10749000 26.53% 11462000 27.90% 39 Senior notes 22013000 51.23% 20201000 47.48% 16220000 40.60% 4220000 35.10% 10298000 25.07% 40 Capital lease obligations 878000 2.04% 763000 1.79% 684000 1.71% 499000 1.23% 492000 1.20% 41 Other long-term debt 1000 0.00% 3000 0.01% 5000 0.01% 6000 0.01% 42 Total debt 22891000 53.28% 20965000 49.27% 16907000 42.32% 14724000 36.34% 10796000 26.28% 43 Less: current installments 542000 1.26% 77000 0.18% 38000 0.10% 33000 0.08% 1321000 3.22% 44 Long-term debt, excluding current installments 22349000 52.02% 20888000 49.09% 16869000 42.23% 14691000 36.26% 9475000 23.06% 45 Other long-term liabilities 1855000 4.32% 965000 4.62% 1844000 4.62% 2042000 5.04% 2051000 4.99% 46 Deferred income taxes 296000 0.69% 854000 2.01% 642000 1.61% 514000 1.27% 319000 0.78% 47 Total liabilities 38633000 89.92% 36233000 85.16% 30624000 76.66% 27996000 69.10% 23307000 56.73% 48 Common stock 88000 0.20% 88000 0.21% 88000 0.22% 88000 0.22% 88000 0.21% 49 Paid-in capital 9787000 22.78% 9347000 21.97% 8885000 22.24% 8402000 20.74% 7948000 19.35% 50 Retained earnings 35519000 82.67% 30973000 72.79% 26995000 67.58% 23180000 57.21% 20038000 48.77% 51 Accumulated other comprehensive income (loss) -867000 -2.02% -898000 -2.11% -452000 -1.13% 46000 0.1 1% 397000 0.97% 52 Treasury stock, at cost 40194000 93.55% 33194000 78.01% 26194000 65.57% 19194000 47.37% 10694000 26.03% 53 Total stockholders' equity 4333000 10.08% 6316000 14.84% 9322000 23.34% 12522000 30.90% 17777000 43.27%55 As Reported Annual Income Statement 56 Report Date 01/29/2017 01/31/2016 02/01/2015 02/02/2014 02/03/2013 57 Currency USD USD USD USD USD 58 Audit Status Not Qualified Not Qualified Not Qualified Not Qualified Not Qualified 59 Consolidated Yes Yes Yes Yes Yes 60 Scale Thousands Thousands Thousands Thousands Thousands 61 Net sales 94595000 100.00% 88519000 100.00% 83176000 100.00% 78812000 100.00% 74754000 100.00% 62 Cost of sales 62282000 65.84% 58254000 65.81% 54222000 65.19% 51422000 65.25% 48912000 65.43% 63 Gross profit 32313000 34.16% 30265000 34.19% 28954000 34.81% 27390000 34.75% 25842000 34.57% 64 Selling, general & administrative expenses 17132000 18.11% 16801000 18.98% 16834000 20.24% 16597000 21.06% 16508000 22.08% 65 Depreciation & amortization expense 1754000 1.85% 1690000 1.91% 1651000 1.98% 1627000 2.06% 1568000 2.10% 66 Total operating expenses 18886000 19.97% 18491000 20.89% 18485000 22.22% 18224000 23.12% 18076000 24.18% 67 Operating income 13427000 14.19% 1 1774000 13.30% 10469000 12.59% 9166000 11.63% 7766000 10.39% 68 Interest & investment income 36000 0.04% 166000 0.19% 337000 0.41% 12000 0.02% 20000 0.03% 69 Interest expense 972000 1.03% 919000 1.04% 830000 1.00% 711000 0.90% 632000 0.85% 70 Other interest & other income (expense) 67000 0.09% 71 Interest & other income (expense), net -936000 -0.99% -753000 -0.85% -493000 -0.59% -699000 -0.89% -545000 -0.73% 72 Earnings before provision for income taxes - United 11568000 12.23% 10207000 11.53% 9217000 11.08% 7770000 9.86% 6677000 8.93% 73 Earnings before provision for income taxes - foreign 923000 0.98% 814000 0.92% 759000 0.91% 697000 0.88% 544000 0.73% 74 Earnings before provision for income taxes 12491000 13.20% 1 1021000 12.45% 9976000 11.99% 8467000 10.74% 7221000 9.66% 75 Current provision (benefit) for income taxes - feder. 3870000 4.09% 3228000 3.65% 2884000 3.47% 2503000 3.18% 2060000 2.76% 76 Current provision (benefit) for income taxes - state 462000 0.49% 466000 0.53% 373000 0.45% 346000 0.44% 302000 0.40% 77 Current provision (benefit) for income taxes - foreig 315000 0.33% 296000 0.33% 258000 0.31% 265000 0.34% 230000 0.31% 78 Total current provision (benefit) for income taxes 4647000 4.91% 3990000 4.51% 3515000 4.23% 3114000 3.95% 2592000 3.47% 79 Deferred provision (benefit) for income taxes - fede -102000 -0.11% 21000 0.02% 127000 0.15% -12000 -0.02% 114000 0.15% 80 Deferred provision (benefit) for income taxes - state 13000 0.01% 10000 0.01% -11000 -0.01% 4000 0.01% 1000 0.00% 81 Deferred provision (benefit) for income taxes - forei -24000 -0.03% -9000 -0.01% -24000 -0.03% -21000 -0.03% 82 Total deferred provision (benefit) for income taxes -113000 -0.12% 22000 0.02% 116000 0.14% -32000 -0.04% 94000 0.13% 83 Provision (benefit) for income taxes 4534000 4.79% 4012000 4.53% 3631000 4.37% 3082000 3.91% 2686000 3.59% 84 Net earnings 7957000 8.41% 7009000 7.92% 6345000 7.63% 5385000 6.83% 4535000 6.07% 85 Weighted average shares outstanding - basic 1229000 1277000 1338000 1425000 1499000 86 Weighted average shares outstanding - diluted 1234000 1283000 1346000 1434000 1511000 87 Year end shares outstanding 1203000 1252000 1307000 1380000 1484000 88 Net earnings (loss) per share - basic 6.47 5.49 4.74 3.78 3.03 89 Net earnings (loss) per share - diluted 6.45 5.46 4.71 3.76 3 90 Dividends per common share 2.36 1.88 1.56 1.16 91 Total number of employees 406000 385000 371000 365000 340000 92 Number of common stockholders 119000 126000 132000 138000 146000 93 Number of beneficiary stockholders 1633000 1477000 1316000 1150000 106600095 As Reported Annual Cash Flow 96 Report Date 01/29/2017 01/31/2016 02/01/2015 02/02/2014 02/03/2013 97 Currency USD USD USD USD USD 98 Audit Status Not Qualified Not Qualified Not Qualified Not Qualified Not Qualified 99 Consolidated Yes Yes Yes Yes Yes 100 Scale Thousands Thousands Thousands Thousands Thousands 101 Net earnings 7957000 7009000 6345000 5385000 4535000 102 Depreciation & amortization 1973000 1863000 1786000 1757000 1684000 103 Stock-based compensation expense 267000 244000 225000 228000 218000 104 Loss (gain) on sales of investments -144000 -323000 105 Goodwill impairment 97000 106 Receivables, net 138000 181000 -81000 -15000 -143000 107 Merchandise inventories -769000 -546000 -124000 455000 -350000 108 Other current assets -48000 -5000 -199000 -5000 93000 109 Accounts payable & accrued expenses 446000 888000 244000 605000 698000 110 Deferred revenue 99000 109000 146000 75000 121000 111 Income taxes payable 109000 154000 168000 1 19000 87000 112 Deferred income taxes -117000 15000 159000 -31000 107000 113 Other long-term liabilities -152000 13000 180000 114 Other assets & liabilities 4000 -33000 48000 -48000 8000 115 Net cash flows from operating activities 9783000 9373000 8242000 7628000 6975000 116 Capital expenditures -1621000 1503000 1442000 1389000 -1312000 117 Proceeds from sales of investments 144000 323000 118 Payments for businesses acquired, net -1666000 -200000 -206000 -170000 119 Proceeds from sales of property & equipment 38000 43000 48000 88000 50000 120 Net cash flows from investing activities -1583000 -2982000 1271000 -1507000 -1432000 121 Proceeds from (repayments of) short-term borrowi 360000 60000 290000 122 Proceeds from long-term borrowings, net of discou 4959000 3991000 1981000 5222000 123 Repayments of long-term debt -3045000 -39000 -39000 -1289000 -32000 124 Repurchases of common stock 6880000 -7000000 -7000000 -8546000 -3984000 125 Proceeds from sales of common stock 218000 228000 252000 241000 784000 126 Cash dividends paid to stockholders -3404000 -3031000 -2530000 -2243000 1743000 127 Other financing activities -78000 4000 -25000 -37000 -59000 128 Net cash flows from financing activities 7870000 -5787000 -7071000 -6652000 -5034000 129 Changes in cash & cash equivalents 330000 604000 -100000 -531000 509000 130 Effect of exchange rate changes on cash & cash e -8000 -11 1000 -106000 -34000 -2000 131 Cash & cash equivalents at beginning of year 2216000 1723000 1929000 2494000 1987000 132 Cash & cash equivalents at end of year 2538000 2216000 1723000 1929000 2494000 133 Cash payments made for interest, net of interest ci 924000 874000 782000 639000 647000 134 Cash payments made for income taxes 4623000 3853000 3435000 2839000 2482000136 RATIOS 137 Return on Equity 183.64% 110.97% 68.06% 43.00% 25.51% 138 Net Profit Margin 8.41% 7.92% 7.63% 6.83% 6.07% 139 Total Asset Turnover 2.20 2.08 2.08 1.95 1.82 140 Financial Leverage Multiplier 9.92 6.74 4.29 3.24 2.31 141 Return on Assets 18.52% 16.47% 15.88% 13.29% 11.04% 142 Gross Profit Margin 34.16% 34.19% 34.81% 34.75% 34.57% 143 Inventory Turnover 4.96 4.93 4.89 4.65 4.57 144 Average Age of Inventory (Days) 73.54 73.99 74.58 78.48 79.92 145 Collection Period (Days) 7.83 7.79 6.51 6.47 6.81 146 Days Sales in Cash (Days) 9.79 9.14 7.56 8.93 12.18 147 Payables Period (Days) 41.02 41.13 39.09 41.15 40.12 148 Fixed Asset Turnover 4.32 3.99 3.66 3.38 3.11 149 Debt Ratio 0.90 0.85 0.77 0.69 0.57 150 Debt-to-Equity Ratio 8.92 5.74 3.29 2.24 1.31 151 Times Interest Earned Ratio 13.81 12.81 12.61 12.89 12.29 152 Operating Profit Margin 14.19% 13.30% 12.59% 11.63% 10.39% 153 Book Value Per Share $3.60 $5.04 $7.13 $9.07 $11.98 154 Market Price Per Share $138.47 $126.51 $103.89 $74.84 $64.20 $41.89 $33.27 155 Market Value D/E Ratio 0.23 0.23 0.23 0.27 0.24 156 Market Value Debt Ratio 0.19 0.19 0.18 0.21 0.20 157 Market Value of Equity $166,579,410.00 $158,390,520.00 $135,784,230.00 $103,279,200.00 $95,272,800.00 158 Book Value of Equity $4,333,000 $6,316,000 $9,322,000 $12,522,000 $17,777,000 159 160 Return on Equity (Market Value) 4.78% 4.43% 4.67% 5.21% 4.76% 161 162 Current Ratio 1.25 1.36 1.36 1.42 1.34 163 Quick (Acid Test) Ratio 0.37 0.41 0.37 0.39 0.41 164 Price to Earnings Ratio 21.47 23.17 22.06 19.90 21.40 165 166 Tax Rate 37.20% 36.20% 35.23% 36.78% 35.90% 167 Return on Invested Capital (ROIC) 30.97% 27.53% 25.85% 21.27% 17.42%