Financial statements are the primary way that public companies communicate its financial activities and position of the business to management, investors and other users of financial information. Home Depot (NYSE symbol: HD), the world giant home improvement retailer, has complex business model that is characterized by its business philosophy, “stack it high, watch it fly” that reflected a primary focus on sales growth in consumers and construction professionals. In the following paper will analyze the financial information presented in 2015 Home Depot’s financial statements, will explain how each statement present the financial information regarding the business, why each statement are important to the business and other users of financial …show more content…
This statement summarizes the assets, liabilities, and net worth (stockholders’ equity) that Home Depot held at a specific point in time (Schroeder, Clark & Cathey, 2010, p. 212). The purpose of the balance sheet is to give users a clear ideal of Home Depot’s financial strength and capabilities of the company’s business. It is important that the balance sheet is used to determine if Home Depot has sufficient cash for immediate needs; the balance sheet is also used to evaluate the relationship between debt and owner’s equity (Kimmel, Weygandt & Kieso, 2013, …show more content…
Cash flow is another financial statement that summarizes a company’s cash inflow and outflow of a business in a specific period of time (Kimmel, Weygandt & Kieso, 2013, p.115). In addition, the cash flow statement presents the net cash increase or decrease from the company’s operating, investing, and financing activities during the period, it also presents how much money that company has at end of the period. Cash from Home Depot’s operating activities is the best measure of the company’s ability to pay its debt and dividend. Home Depot has managed a health cash balance, which has reported on its balance sheet, the company generated a significant amount of cash from its operating activities. On the cash flow statement, Home Depot’s net cash provided by operating activities was gained 614 million in 2015, which compared to $7,628 in 2014 (The Home Depot, 2016). Along with the gaining in its net earning, Home Depot present a strong financial position to its investors, also provided valuable financial information to its potential investors that how Home Depot generated and spent its cash, and what changes in the cash balance within the period. Also, the cash flow helps Home Depot management to identify financial opportunities and risks; this statement ensures the company’s business is heading in its planed
The company I have chosen to research for my final paper is Home Depot. Home Depot’s principal assets, debt and stock information as of January 30, 2001 are as follows: (amounts in millions, except stock)
The Home Depot organization has generated quick growth throughout its operating years. From the first store openings in 1979, the firm has created an exceptional growth pattern, opening their 100th store in 1989 and continuing on into the global market. The company feels that their unique culture and values are what gives them their competitive advantage in the marketplace. Their strengths are in the strong position they have with professional
For this analysis we have chosen Home Depot Incorporated a home improvement retailer. It primary clients are professional “professional remodelers, general contractors, repairmen, small business owners, and tradesmen” (Yahoo Finance, 2015). In addition Home Depot sub contracts installations to third parties (Yahoo Finance, 2015). Home Depot has 2,270 stores in the US and international stores located in Mexico and Canada (Yahoo Finance 2015).
Home Depot and Lowe's are two home improvement chains in the United States. Home Depot is the leading company in this industry followed by Lowe's as the second largest. This paper uses financial ratios to compare these companies regarding operating profitability, asset utilization, and risk management in the years 2005 and 2006. The evaluation compares the performances of these stores against the industry.
Home Depot is built on the principle of creating value for our stockholders while never forgetting our values. We seek to be profitable, responsible and balance the needs of our communities. Throughout our company, our associates are challenged with finding ways in which we can provide the best products for our customers, provide the best possible work environment for our associates, have a positive impact on the communities in which we operate, and provide excellent returns for our stockholders.
Balance Sheet and Covenants – Our cash position was at 115.1 Days of Cash on Hand at October 31th, although there were 46 offsetting days in third party reserves. Days in Accounts Receivable were at 51.3 days. The Debt Service Coverage Ratio at the end of October was 4.69-to-1 versus the minimum covenant requirement of
When it comes to home improvement projects, the one-stop shop, Home Depot should come to mind. As one of the world’s largest home improvement specialty retailers, Home Depot operates over 2,256 stores throughout the U.S., Canada and Mexico. The home improvement store offers a variety of products, ranging from lumber to appliances, to name a few. Geared towards the DIY marketing demographic, Home Depot was founded by Bernie Marcus and Arthur Blank in 1978. The first formal stores opened June 1979 in Atlanta, Georgia.
Home Depot’s improvements are been seen from stock prices to better customer experience through new technologies (www.forbes.com, 2015). The company’s stock increased by 175% and introduced FIRST phones, a mobile in-store technology (www.forbes.com, 2015). Therefore, the strategic plan is for this device is to increase customer interaction for information on products and checking its availability (www.forbes.com, 2015). Also, Home Depot put together another strategy which made same day shipping on customers that order online before 5 p.m. (www.forbes.com, 2015). However, Finance and Information Systems can’t be the only strategy focus for the company. It must consider all entities to ensure that all functional strategies are working together.
Financial statements are a formal record of financial activities. During this 10-K report of financial analysis, we provided an overview of the Balance Sheet and Income Statement. The financial statement also overviewed what we analyzed comparing two major affordable retail companies such as Wal-Mart and Target. The information resulted in accurate information provided by the Security Exchange Commission (SEC). The SEC information gave us insight to analyze the two retails financial condition that involved both short and long-term, income and expense, and assets and liabilities. This insight is an important tool for investors in assessing Wal-Mart and Target overall position in the market place. From what it owes and owns as well the
The balance sheet is one of the major financial statements used by accountants and business owners. The balance sheet displays an organization's fiscal position at the finish of a specified date. Some depict the asset report as a "preview" of the organization's budgetary position at a focus a minute or a moment in time. The income statement is imperative since it demonstrates the benefit of an organization throughout the time interim specified. The period of time that the statement spreads is picked by the business and will differ. The statement of cash flows reports the sources and uses of cash by operating activities, investing activities, financing activities, and certain supplemental information for the period specified. The statement of stockholders’ equity sho...
Balance sheet: It is often referred to as the statement of financial condition. It is a snapshot of what you have and what you owe at a given point in time. It lists all assets, liabilities and equity or net worth, with their values. The value of the assets must equal the value of the debt and the
...essment. Based off the information that was given in the case study it seems to be the company that could potentially have a cash flow issue is Yum Brands, Inc. That is due to them having the lowest operating cash flow/current liabilities, which a major difference between they years. Yum Brands, Inc. also had the lowest ratio in cash flow/total debt out of the three companies. In wrapping all this up the statement of cash flow is one of the best ways to evaluate a companies flow of cash. This statement allows people to look at various areas and can be known as the heartbeat of the company.
A strong balance sheet gives an investor an idea of how financially stable the company really is. Many professionals consider the top line, or cash, the most important item on a company’s balance sheet. The big three categories on any balance sheet are “assets, liabilities, and shareholder’s equity.” Evaluating Barnes & Noble’s assets for the time 2014, 2013 and 2012 the company’s performance summarizes that it is remaining stable. These numbers reflect a steady rate over the three year period. Like assets, liabilities are current or noncurrent. Current liabilities are obligations due within a year. Key investors look for companies with fewer liabilities than assets. Analyzing this type of important information, informs a potential investor that if the company owes more money than they are bringing in that this company is in financial trouble. Assessing the liabilities of the balance sheet, for the same time period, it is also consistent with the assets. The cash flow demonstrates a stable performance in the company’s 2014, 2013 and 2012 assets and would be determined that the liabilities of this company are also stable. Equity is equal to assets minus liabilities, and it represents how much the company’s shareholders actually have claim to. Investors customarily observe closely to the retained earnings and paid-in capital under
Cash flow statement is a financial statement that enables us know how changes in balance sheet accounts and income affect cash and the equivalent of cash.
Financial communications involves financial reporting, McCarty’s engages in financial reporting which involves communication, several individuals and firms alike hold an interest in how McCarty’s performs as a company, these individuals or firms can be called stakeholders. Stakeholders can learn about a company’s performance, in this case, McCarty’s, by reviewing the yearly published financial statements. Stakeholders can use the income statement to find out the company’s profitability, the balance sheet communicates the company’s ability to obtain and invest its resources. The statement of cash flows communicates McCarty’s ability to manage its cash, whereas; financial results are communicated through published financi...