The Home Depot Inc. reported the following selected information for the last five years ending on the Saturday closest to January 31 (in U.S. $ millions, except earnings per share):

Instructions
(a) Calculate Home Depot's return on common shareholders' equity (for this calculation, note that the company has no preferred shares), return on assets, and profit margin ratios before and after discontinued operations for each of the last five years.
(b) Evaluate Home Depot's profitability over the last five years before and after discontinued operations.
(c) Which analysis-before or aft er discontinued operations-is more relevant to investors? Explain.

Transcribed Image Text:

2012 2011 2010 E0 009 Net sales Average common shareholders' equity Average total assets Profit from continuing operations Net loss (gain) from discontinued operations Profit Earnings per share from continuing operations Total earnings per s $74,754$70,395 $67,997 $66,176 $71,288 17,746 17,837 19,141 0,801 40,321 4,50 41,020 42,744 3,338 18,394 18,585 4,535 3,883 2,620 2,312 (52) 4,535 3.03 3.03 3,883 2.49 2.49 3,338 2.01 2.01 2,661 1.55 1.57 2,260 1.37 1.34