Using the attached income statement and balance sheet for Home Depot, Inc. caclulate the following and provide comments where appropriate:
Page of 5 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 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 19,513 1,870 247 21,630 15,530 21,729 15,843 19,675 14,681 (73) 1 201 (74) 1,057 1,128 14,715 3,473 11,242 $ (93) 1,051 16 974 14,556 3,435 11,121 $ 983 13,698 5,068 8,630 s Basic weighted average common shares Basic earnings per share 1,093 10.29 $ 1.137 9.78 5 1,178 7.33 Diluted weighted average common shares Diluted earnings per share 1,097 10.25 S 1.143 9.73 $ 1,184 7.29 $ Fiscal 2019 and fiscal 2017 include 52 weeks. Fical 2018 includes 3 weeks. See accompanying notes to consolidated financial statements Page > of 5 THE HOME DEPOT, INC. CONSOLIDATED BALANCE SHEETS February 2, 2020 February 2019 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 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 $ 1,339 7.755 1.506 Liabilities and Stockholders' Equity Current liabilities: Short-term debt Accounts payable Accrued salaries and related expenses Sales taxes payable Deferred revenue Income taxes payablo Current installments of long-term debt Current operating lease abilities 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 1.782 11 1.056 974 $ 7,787 1.494 605 2,116 55 1.839 828 2,677 18,375 28,670 5,068 706 1,535 54,352 2,611 16,716 26.807 491 1,867 45,881 Page of 5 1,782 11 1,056 CHIPS 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 2,116 55 1,839 828 2,677 18,375 28,670 5,066 706 1,535 54,352 2,611 16,716 26,807 491 1,867 45,881 89 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 89 11.001 51,729 (739) 10,578 46.423 (772) (65,196) (3.116) 51,236 $ (58.196) (1,878) 44,003 See accompagnate to consolidated financial stats 33 OPP D a) By what percentage did Net Earnings change from 2018 to 2019? Indicate whether this is an increase or a decrease (show calculations, round to 1 decimal place). Increase or Decrease? (11,242-11,121/11,121x100 1.08 % increase b) Calculate the Current Ratio for 2018 and 2019. Does Home Depot appear to be more or less solvent in 2019 than it was in 2018? (show calculations, round to 2 decimal places) 2019 2018 2,133/974 2.19 1,778/1,33 1.33 More or less solvent? more c) Calculate the Number of Day's Sales in Inventory for 2019. If the industry average for this measure is 60 days, how does Home Depot compare to the competition in terms of its ability to manage inventory? (show calculations, round to 1 decimal place) days days Better or worse than the competition? d) Calculate the Ratio of Liabilities to Stockholder's Equity for 2019. If the industry average for this ratio is 2.5, does Home Depot appear to be less or more risky than the industry in terms of its debt structure? (show calculations, round to 1 decimal place) Less or more risky than the industry
