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Posted on Jul 06, 2024

Review the Home Depot Financial Statements (Appendix A) discuss the following: Describe what you see in the financial reports. Discuss why you believe it is

Review the Home Depot Financial Statements (Appendix A) discuss the following:

Describe what you see in the financial reports.
Discuss why you believe it is important for an independent Certified Public Accountant to review and report on a corporation's financial health verses relying on the company to report its own statements.
In your opinion, is Home Depot's financial status changing?Why?
If you looking at Home Depot as a possible investment, what parts of the financial statements do you feel would be beneficial for you to analyze.
To what degree, if any, can the leaders of Home Depot use the financial statements to help formulate their strategic plans?

APPENDIX A Home Depot 2018 Financial Statements Report of Independent Registered Public Accounting Firm Page 1\" The Stockholders and Board of Directors The Home Depot, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying Consolidated Balance Sheets of The Home Depot, Inc. and Subsidiaries as of February 3, 2019 and January 28, 2018, and the related Consolidated Statements of Earnings, Comprehensive Income, Stockholders' Equity, and Cash Flows for each of the scal years in the three-year period ended February 3, 2019, and the related notes (collectively, the "Consolidated Financial Statements\"). In our opinion, the Consolidated Financial Statements present fairly, in all material respects, the nancial position of The Home Depot, Inc. and Subsidiaries as of February 3, 2019 and January 28, 2018, and the results of their operations and their cash ows for each of the scal years in the threeyear period ended February 3, 2019, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (\"PCAOB\"), The Home Depot, Inc.'s internal control over nancial reporting as of February 3, 2019, based on criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 28, 2019 expressed an unqualied opinion on the effectiveness of the Company's internal control over nancial reporting. Basis for Opinion These Consolidated Financial Statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audits. We are a public accounting rm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about Whether the Consolidated Financial Statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the Consolidated Financial Statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the Consolidated Financial Statements. Our audits also included evaluating the accounting principles used and signicant estimates made by management, as well as evaluating the overall presentation of the Consolidated Financial Statements. We believe that our audits provide a reasonable basis for our opinion. fs/ KPMG LLP We have served as the Company's auditor since 1979. Atlanta, Georgia March 28, 2019 THE HOME DEPOT, INC. CONSOLIDATED BALANCE SHEETS 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 Goodwill Other assets Total assets Liabilities and Stockholders' Equity Current liabilities: Shortterm debt Accounts payable Accrued salaries and related expenses Sales taxes payable Deferred revenue Income taxes payable Current installments of long-term debt Other accrued expenses Total current liabilities Long-term debt, excluding current installments Deferred income taxes Other long-term liabilities Total liabilities Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,782 at February 3, 2019 and 1,780 shares at January 28, 2018; outstanding: 1,105 shares at February 3, 2019 and 1,158 shares at January 28, 2018 Paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost, 677 shares at February 3, 2019 and 622 shares at January 28, 2018 Total stockholders' (decit) equity Total liabilities and stockholders' equity See accompanying notes to consolidated nancial statements, February 3, 2019 $ 1,778 1,936 13,925 890 18,529 22,375 2,252 847 $ 44,003 $ 1,339 7,755 1,506 656 1,782 11 1,056 2,611 16,716 26,807 491 1,867 45,881 89 10,578 46,423 (772) (58,196) (1,878) $ 44,003 January 28, 2018 $ 3,595 1,952 12,748 638 18,933 22,075 2,275 1,246 $ 44,529 $ 1,559 7,244 1,640 520 1,805 54 1,202 2,170 16,194 24,267 440 2,174 43,075 89 10,192 39,935 (566) (48,196) 1,454 $ 44,529 THE HOME DEPOT, INC. CONSOLIDATED STATEMENTS OF EARNINGS in millions, except per share data Fiscal 2018 Fiscal 2017 Fiscal 2016 Net sales 108,203 100,904 $ 94,595 Cost of sales 71,043 66,548 62,282 Gross profit 37,160 34,356 32,313 Operating expenses: Selling, general and administrative 19,513 17,864 17, 132 Depreciation and amortization 1,870 1,811 1,754 Impairment loss 247 Total operating expenses 21,630 19,675 18,886 Operating income 15,530 14,681 13,427 Interest and other (income) expense: Interest and investment income (93) (74) (36) Interest expense 1,051 1,057 972 Other 16 Interest and other, net 974 983 936 Earnings before provision for income taxes 14,556 13,698 12,49 Provision for income taxes 3,435 5,068 4,534 Net earnings 11,121 3,630 7,957 Basic weighted average common shares 1,137 1,178 1,229 Basic earnings per share $ 9.78 $ 7.33 6.47 Diluted weighted average common shares 1,143 1,184 1,234 Diluted earnings per share $ 9.73 $ 7.29 6.45 Fiscal 2018 includes 53 weeks. Fiscal 2017 and fiscal 2016 include 52 weeks. See accompanying notes to consolidated financial statements Page A-4 THE HOME DEPOT, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME in millions Fiscal 2018 Fiscal 2017 Fiscal 2016 Net earnings $ 11,121 $ 8,630 $ 7,957 Other comprehensive (loss) income: Foreign currency translation adjustments (267) 311 (3) Cash flow hedges, net of tax 53 (1) 34 Other 8 (9) Total other comprehensive (loss) income 206) 301 31 Comprehensive income $ 10,915 $ 8,931 $ 7,988 Fiscal 2018 includes 53 weeks. Fiscal 2017 and fiscal 2016 include 52 weeks. d financial statements.THE HOME DEPOT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS in millions Fiscal 2018 Fiscal 2017 Fiscal 2016 Cash Flows from Operating Activities: Net earnings $ 11,121 $ 8,630 $ 7,957 Reconciliation of net earnings to net cash provided by operating activities: Depreciation and amortization 2,152 2,062 1,973 Stock-based compensation expense 282 273 267 Impairment loss 247 Changes in receivables, net 33 139 (138) Changes in merchandise inventories (1,244) (84) (769) Changes in other current assets (257) (10) (48) Changes in accounts payable and accrued expenses 743 352 446 Changes in deferred revenue 80 128 99 Changes in income taxes payable (42) 29 109 Changes in deferred income taxes 26 92 (117) Other operating activities (103) 420 4 Net cash provided by operating activities 13,038 12,031 9,783 Cash Flows from Investing Activities: Capital expenditures, net of non-cash capital expenditures (2,442) (1,897) (1,621) Payments for businesses acquired, net (21) (374) Proceeds from sales of property and equipment 33 47 38 Other investing activities 14 (4) Net cash used in investing activities (2,416) (2,228) (1,583) Cash Flows from Financing Activities: (Repayments of) proceeds from shortterm debt, net (220) 850 360 Proceeds from long-term debt, net of discounts 3,466 2,991 4,959 Repayments of long-term debt (1,209) (543) (3,045) Repurchases of common stock (9,963) (8,000) (6,880) Proceeds from sales of common stock 236 255 218 Cash dividends (4,704) (4,212) (3,404) Other nancing activities (26) (211) (78) Net cash used in nancing activities (12,420) (8,870) (7,870) Change in cash and cash equivalents (1,798) 933 330 Effect of exchange rate changes on cash and cash equivalents (19) 124 (8) Cash and cash equivalents at beginning of year 3,595 2,538 2,216 Cash and cash equivalents at end of year $ 1,778 $ 3,595 $ 2,538 Supplemental Disclosures: Cash paid for income taxes $ 3,774 $ 4,732 $ 4,623 Cash paid for interest, net of interest capitalized 1,035 991 924 Noncash capital expenditures 248 150 179 Fiscal 2018 includes 53 weeks. Fiscai 2017 and fiscal 2016 include 52 weeks. See accompanying notes to consolidated nancial statements. THE HOME DEPOT, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY in millions Fiscal 2018 Fiscal 2017 Fiscal 2016 Common Stock: Balance at beginning of year $ 89 $ 88 $ 88 Shares issued under employee stock plans Balance at end of year 89 89 88 Paid-in Capital: Balance at beginning of year 10,192 9,787 9,347 Shares issued under employee stock plans 104 132 76 Tax effect of stock-based compensation 97 Stock-based compensation expense 282 273 267 Balance at end of year 10,578 10,192 9,787 Retained Earnings: Balance at beginning of year 39,935 35,519 30,973 Cumulative effect of accounting change 75 Net earnings 11,121 8,630 7,957 Cash dividends (4, 704) (4,212) (3,404) Other (4) (2) (7 Balance at end of year 46,423 39,935 35,519 Accumulated Other Comprehensive Income (Loss): Balance at beginning of year (566) (867) (898) Foreign currency translation adjustments (267) 311 (3) Cash flow hedges, net of tax 53 (1) 34 Other 8 (9) Balance at end of year (772 (566 867 Treasury Stock: Balance at beginning of year (48,196) (40,194) (33,194) Repurchases of common stock (10,000) (8,002) (7,000) Balance at end of year (58,196) (48,196) (40,194) Total stockholders' (deficit) equity $ (1,878) $ 1,454 $ 4,333 Fiscal 2018 includes 53 weeks. Fiscal 2017 and fiscal 2016 include 52 weeks. See accompanying notes to consolidated financial statements