The Income Statement and Balance Sheet for The Home Depot, Inc. can be found as separate worksheets on tabs (a) and (b), respectively. On worksheet (c), prepare a ratio analysis for 2017 and 2016 that includes the following ratios: Current ratio, Net income to average commin stockholder's equity, Inventory turnover, Number of days' sales in accounts receivable (assume 365 days in a year), Equity ratio, Profit Margin, Total Assets turnover, Acid-test (quick ratio)

For three ratios (current ratio, inventory turnover, and profit margin) include your interpetation of results of your analysis. Your interpretation should include 1) what the ratio measures (definition of ratio), 2) whether it is increasing or decreasing, and 3) whether the company should be concerned about the change in ratio.

A1 The Income Sta The Income Statement and Balance Sheet for The Home Depot, Inc. can be found as separate worksheets on tabs (a) and (b), respectively. On worksheet , prepare a ratio analysis for 2017 and 2016 that includes 1 the following ratios: 2 Current ratio 3 Net income to average common stockholder's equity 4 Inventory turnover 5 Number of days' sales in accounts receivable (assume 365 days in a year) 6 Equity ratio 7 Profit Margin 8 Total Assets turnover 9 Acid-test (quick ratio) 10 For three ratios (current ratio, inventory turnover, and profit margin) include your interpretation of the results of your analysis. Your interpretation should include what the ratio measures, whether it is increasing or decreasing, and whether the company should be 11 concerned about the change in the ratio. 12 13 14 15 16 17 18 19 20 21 Instructions HD Income Statement(a) HD Balance Sheet Ready A B C E D For the years ended January 29, 2017 January 31, 2016 February 1, 2015 94,595 62,282 32,313 88,519 58,254 30,265 83,176 54,787 28,389 3 4 5 (all numbers in millions) 6 7 Revenue: 8 Total Revenue 9 Cost of Revenue (COGS) 10 Gross profit 11 12 Operating Expenses: 13 Selling, General & Administrative 14 Other Expense 15 Total Operating Expense 16 17 Operating income 18 19 Other Income 20 Earnings before Income and Taxes 21 Interest Expense 22 Income before Tax 23. Income Tax Expense 24 Net Income 25 17,132 1,754 18,886 16,801 1,690 18,491 16,280 1,640 17,920 13,427 11,774 10,469 36 13,463 972 12,491 4,534 7,957 166 11,940 919 11,021 4,012 7,009 337 10,806 830 9,976 3,631 6,345 1 2 The Home Depot, Inc. Balance Sheet 3 February 1, 2015 1,723 1,484 11,079 1,016 15,302 4 5 (all numbers in millions) 6 January 29, 2017 January 31, 2016 7 Current Assets: 8 Cash and Cash Equivalents 2,538 2,216 9 Net Receivables 2,029 1,890 10 Inventory 12,549 11,809 11 Other Current Assets 608 569 12 Total Current Assets 17,724 16,484 13 14 Long-term Assets: 15 Property, Plant & Equipment 21,914 22,191 16 Goodwill 2,093 2,102 17 Other 1,235 1.196 18 Total Long-term Assets 25,242 25,489 19 Total Assets 42,966 41,973 20 21 Current Liabilities: 22 Accounts Payable 11,212 10,531 23 Short-term debt 1,252 24 Other current liabilities 1,669 1,566 25 Total Current Liabilities: 14,133 12,524 26 27 Long-term Liabilities: 28 Long-term Debt 22,349 20,789 29 Other 1,855 1,965 Instructions HD Income Statement(a) HD Balance Sheet(b) Worksheet 22.720 1,353 571 24,614 39,946 427 9,473 328 1,468 11,269 16,869 1,844