Expert Answer:Project #1 Ratio Analysis and Anual Report

  

Solved by verified expert:Get the 2017 annual balance sheets and income statements for Home Depot and Lowe’s. You may use each company’s homepage or internet finance related pages, such as SEC filings to get the data. each worksheet designates the ratio table, balance sheet and income statement of each company. there is a sample, please look it and make a project
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Project #1 (Ratio Analysis)
1. Get the 2017 annual balance sheets and income statements for Home
Depot and Lowe’s. You may use each company’s homepage or
internet finance related pages, such as SEC filings to get the data.
2. Construct the ratio table such as Table 4-7 on p.106.
(You may exclude the following ratios; Market value added, Market
to book ratio, EVA, Payout ratio, and Sustainable growth.)
3. Upload your file to the Canvas with five worksheets of which each
worksheet designates the ratio table, balance sheet and income
statement of each company, respectively, (do not just list the link) by
10:30 am on March 25. Preparation of problem sets should be done
individually but you are allowed to discuss the related concepts with
other students. Any identical copies will be treated as NO Submission.
Dow Chemical
Exxon Mobil
Profitability Ratios
Return on assets (ROA)
Return on capital (ROC)
Return on equity (ROE)
Operating profit margin
0.75%
1.12%
1.46%
2.34%
5.65%
9.09%
10.50%
8.31%
Efficiency Ratios
Asset Turnover
Fixed-asset turnover
Receivables turnover
Average collection period (days)
Inventory turnover
Days in inventory
0.78
1.12
6.96
98.68
6.85
53.31
0.72
0.82
11.09
39.4
10.77
33.9
23.05%
29.96%
47.79%
2.10
13.46%
15.55%
46.17%
32.07
0.12
1.91
1.26
0.51
-0.03
0.82
0.52
0.05
Leverage Ratios
Long-term debt ratio
Long-term debt-equity ratio
Total debt ratio
Times interest earned
Liquidity Ratios
Net working capital to assets
Current ratio
Quick ratio
Cash ratio
Income Statement
All numbers in thousands
Revenue
12/31/2017
12/31/2016
Total Revenue
62,484,000
48,158,000
Cost of Revenue
50,414,000
37,640,000
Gross Profit
12,070,000
10,518,000
Research Development
2,110,000
1,584,000
Selling General and Administrative
4,021,000
2,956,000
Non Recurring
4,381,000
2,057,000
Others
1,013,000
544,000
11,525,000
7,141,000
Operating Expenses
Total Operating Expenses
Operating Income or Loss
545,000
3,377,000
Income from Continuing Operations
Total Other Income/Expenses Net
966,000
1,452,000
Earnings Before Interest and Taxes
2,275,000
5,271,000
Interest Expense
1,082,000
858,000
Income Before Tax
1,193,000
4,413,000
Income Tax Expense
Minority Interest
Net Income From Continuing Ops
-476,000
9,000
1,597,000
1,242,000
1,669,000
4,404,000
-77,000
-77,000
Extraordinary Items


Effect Of Accounting Changes


Non-recurring Events
Discontinued Operations
Other Items
Net Income
Net Income
Preferred Stock And Other Adjustments
Net Income Applicable To Common
Shares


1,460,000

1,460,000
4,318,000

3,978,000
Income Statement
All numbers in thousands
12/31/2017
Revenue
12/31/2016
Total Revenue
237,162,000
200,628,000
Cost of Revenue
162,345,000
136,098,000
Gross Profit
74,817,000
64,530,000
Operating Expenses
Research Development
Selling General and Administrative
Non Recurring
Others
Total Operating Expenses
Operating Income or Loss


41,060,000
39,819,000
1,790,000
1,467,000
19,893,000
22,308,000


12,074,000
936,000
Income from Continuing Operations
Total Other Income/Expenses Net
1,821,000
2,680,000
19,275,000
8,422,000
601,000
453,000
Income Before Tax
18,674,000
7,969,000
Income Tax Expense
-1,174,000
-406,000
Minority Interest
6,812,000
6,505,000
Net Income From Continuing Ops
25,090,000
12,646,000
Earnings Before Interest and Taxes
Interest Expense
Non-recurring Events
Discontinued Operations


Extraordinary Items


Effect Of Accounting Changes


Other Items
Net Income
Net Income
Preferred Stock And Other Adjustments
Net Income Applicable To
Common Shares


19,710,000

19,710,000
7,840,000

7,840,000
12/31/2015
239,854,000
165,590,000
74,264,000
41,810,000
1,523,000
18,048,000
12,883,000
1,750,000
22,277,000
311,000
21,966,000
5,415,000
5,999,000
23,794,000


16,150,000

16,150,000
Balance Sheet
All numbers in thousands
Period Ending
Current Assets
12/31/2017
Cash And Cash Equivalents
13,438,000
Short Term Investments
12/31/2016
6,607,000
956,000

Net Receivables
16,893,000
8,978,000
Inventory
16,992,000
7,363,000
Other Current Assets
1,614,000
711,000
Total Current Assets
49,893,000
23,659,000
Long Term Investments
8,580,000
7,424,000
Property Plant and Equipment
36,247,000
23,486,000
Goodwill
59,527,000
15,272,000
Intangible Assets
33,274,000
6,026,000
Accumulated Amortization


Other Assets


4,643,000
3,644,000
Deferred Long Term Asset Charges
Total Assets
192,164,000
79,511,000
Current Liabilities
Accounts Payable
Short/Current Long Term Debt
Other Current Liabilities
Total Current Liabilities
22,113,000
11,697,000
4,015,000
907,000
26,128,000
12,604,000
Long Term Debt
30,056,000
20,456,000
Other Liabilities
27,787,000
18,299,000
Deferred Long Term Liability Charges
6,266,000
923,000
Minority Interest
1,597,000
1,242,000


Negative Goodwill
Total Liabilities
91,834,000
53,524,000
Stockholders’ Equity
Misc. Stocks Options Warrants


Redeemable Preferred Stock


Preferred Stock


Common Stock
23,000
3,107,000
Retained Earnings
29,211,000
30,338,000
Treasury Stock
-1,000,000
-1,659,000
Capital Surplus
81,257,000
4,262,000
Other Stockholder Equity
-9,161,000
-10,061,000
Total Stockholder Equity
100,330,000
25,987,000
Net Tangible Assets
7,529,000
4,689,000
Balance Sheet
All numbers in thousands
Period Ending
Current Assets
Cash And Cash Equivalents
Short Term Investments
12/31/2017
12/31/2016
3,177,000
3,657,000


Net Receivables
25,597,000
21,394,000
Inventory
16,992,000
15,080,000
Other Current Assets
1,368,000
1,285,000
Total Current Assets
47,134,000
41,416,000
Long Term Investments
Property Plant and Equipment
39,160,000
35,102,000
252,630,000
244,224,000
Goodwill


Intangible Assets


Accumulated Amortization


9,767,000
9,572,000
Other Assets
Deferred Long Term Asset Charges
Total Assets


348,691,000
330,314,000
Accounts Payable
39,841,000
33,808,000
Short/Current Long Term Debt
17,930,000
13,830,000


Current Liabilities
Other Current Liabilities
Total Current Liabilities
57,771,000
47,638,000
Long Term Debt
29,180,000
34,056,000
Other Liabilities
40,347,000
40,749,000
Deferred Long Term Liability Charges
26,893,000
34,041,000
6,812,000
6,505,000


Minority Interest
Negative Goodwill
Total Liabilities
161,003,000
162,989,000
Stockholders’ Equity
Misc. Stocks Options Warrants


Redeemable Preferred Stock


Preferred Stock


Common Stock
14,656,000
12,157,000
414,540,000
407,831,000
Treasury Stock
-225,246,000
-230,424,000
Capital Surplus


Retained Earnings
Other Stockholder Equity
-16,262,000
-22,239,000
Total Stockholder Equity
187,688,000
167,325,000
Net Tangible Assets
187,688,000
167,325,000
12/31/2015
3,705,000
19,875,000
16,245,000
2,798,000
42,623,000
34,245,000
251,605,000
8,285,000
336,758,000
35,214,000
18,762,000
53,976,000
25,342,000
43,812,000
36,818,000
5,999,000
165,947,000
11,612,000
412,444,000
-229,734,000
-23,511,000
170,811,000
170,811,000
ANNUAL REPORT 2017
Dear Shareholders:
2017 was a record year for our company. I’m proud of our financial results, but prouder still of how our company
responded to an unprecedented number of natural disasters across all geographies. Our associates and suppliers came
together to not only provide for our customers in a time of need, but also to support impacted communities.
During fiscal 2017, sales grew 6.7 percent to $100.9 billion, with comparable sales growth of 6.8 percent for the total
company and 6.9 percent in the U.S. We saw sales growth in all of our U.S. regions, Canada and Mexico. Our fiscal 2017
net earnings were $8.6 billion, or $7.29 per share, a 13.0 percent increase from the prior year.
While we are pleased with our results, we know there is more work to be done. The retail landscape is changing at an
unprecedented rate. Many say that retail has changed more in the last three years than the prior few decades. Our stores
are the hub of our business, but our customers are shopping and interacting with us differently. For example, our online
sales now make up 6.7 percent of total sales, and over 45 percent of all online U.S. orders are picked up inside our stores.
Further, customer expectations continue to evolve. To address these changing needs and continue to win in the market,
we are proactively investing in our business – creating what we are calling the “One Home Depot” experience.
Simply put, our vision for One Home Depot is a frictionless shopping experience regardless of how, when, or where our
customers shop. To accomplish this, over the next three years, we will invest more than $11 billion in our stores and
supply chain, our digital experience, and of course, our people. We are investing in the customer experience, we are
investing in the future of our business, and we are investing to create value.
Investing in the Customer Experience
We are creating a seamless, interconnected shopping experience as customers increasingly blend both the physical and
digital worlds. We believe that when a customer comes to one of our physical stores, it needs to be a great experience.
Our customers have told us that they find our stores hard to navigate and that it takes too long to check out. We are
acting on this feedback with investments in navigation, as well as in the front-end of our stores to facilitate a faster and
easier checkout experience. Our store investments do not stop there. For example, we are adding lockers to our stores to
facilitate the interconnected experience. With these automated lockers, picking up an online order has never been easier.
Our customers shop The Home Depot because we offer products and services at great values for both our professional
and do-it-yourself customers. Our vendor partners work with us to bring great product innovation that saves our
customers time and money. And our product assortment continues to evolve. In 2017, we purchased Compact Power
Equipment, a leading provider of equipment rental and maintenance. This acquisition allows us to further improve the
customer experience, particularly for our professional customers, through enhanced equipment and tool rental offerings.
Further, based on customer feedback, we plan to leverage our company as an online destination for expanded décor
categories. Our recent purchase of The Company Store, an online retailer of textiles and décor products, accelerates
this effort.
We will continue to be the customer’s advocate for value, delivering the best products and services at the best value,
every single day.
Investing in the Future of Our Business
We have built a strong foundation as the number one retailer for home improvement. We believe the investments we are
making in the One Home Depot experience will ensure that we maintain our momentum today and position the business
for long-term success.
Over the past ten years, we have been on a journey to transform our supply chain, and the team has done a fantastic
job. Our supply chain moves more home improvement goods than anyone else. As expectations around product
fulfillment and delivery for both our professional and do-it-yourself customers continue to grow, we will invest to ensure
we have a world-class supply chain for the unique needs of home improvement items. As part of our investment plan, over
the next five years, we will invest approximately $1.2 billion in our supply chain. These investments will enable same and
next-day delivery capabilities for 90 percent of the U.S. population. Our goal is to create the fastest, most efficient delivery
in home improvement.
Investing to Create Value
Our strategy to create the One Home Depot experience is driven by our desire to create value for all stakeholders. This
includes our shareholders, our associates, our supplier partners and the communities that we serve. We are investing
in all aspects of the business to create value for all – value that extends far beyond the current year. As we invest in the
customer experience and position ourselves for future growth, we are enhancing our already strong foundation to be able
to continue to return value to all parties for years to come.
Our company is rock solid strong. And with the Tax Cuts and Jobs Act of 2017, we find ourselves in an even stronger
financial position. Our capital allocation philosophy is straightforward. We will continue to invest in the business to drive
growth as well as to drive productivity and efficiency. We will invest in our associates to provide them with flexible work
schedules and market competitive compensation and benefits. We look to return a meaningful percentage of earnings to
our shareholders through dividends and share repurchases. In fact, during fiscal 2017, after investing in the business, we
returned over $12 billion to our shareholders in the form of dividends and share repurchases.
As we look ahead, we expect our investments will result in continued growth and profitability. By fiscal 2020 we believe our
sales could reach as high as $120 billion. With that, our operating margin could reach as high as 15 percent, with a return
on invested capital 1 of more than 40 percent.
Our Culture
As we continue down this path to create the One Home Depot experience, I want to share what is not changing – our
culture. Our founders established the culture of The Home Depot nearly forty years ago, and it is alive and well in our
business today. Our more than 400,000 orange-blooded associates live our culture every day. They are our single-greatest
asset, and they differentiate us in the marketplace.
1
Return on invested capital, or ROIC, is defined as net operating profit after tax, a non-GAAP financial measure, for the most recent twelve-month period, divided by the
average of beginning and ending long-term debt (including current installments) and equity for the most recent twelve-month period. For a reconciliation of net operating
profit after tax to net earnings, the most comparable GAAP financial measure, and our calculation of ROIC, see “Non-GAAP Financial Measures” on page 23 of this
Annual Report on Form 10-K.
Our culture stretches beyond our stores into the communities we serve. We will remember 2017 as a year for taking
care of our communities and associates impacted by natural disasters. Together with The Home Depot Foundation, we
committed over $3 million to help people recover from Hurricanes Harvey, Irma and Maria, the devastating earthquakes
that struck Mexico, and the flooding and wildfires in Canada and California. In addition, The Homer Fund, a 501(c)(3)
entity created by our founders to help Home Depot associates in need, gave charitable grants to approximately 15,000
associates in 2017, including approximately 6,000 grants to associates impacted by the natural disasters.
Beyond disaster relief, we continued to positively impact the lives of military veterans and their families, completing
volunteer projects with our associates and community partners in more than 1,000 cities across the country. Since 2011,
The Home Depot Foundation has enhanced more than 37,000 veteran homes and facilities and contributed nearly a
quarter of a billion dollars to veteran-related causes.
Our culture also drives our focus on the social and environmental impacts of our business. During fiscal 2017, we
received our tenth consecutive year of recognition from the Environmental Protection Agency as Retailer of the Year. In
addition, we have made significant progress on our 2020 goal of sourcing 135 megawatts of renewable and alternative
energy from the expansion of solar, wind and fuel cell technology.
Our vision is simple – One Home Depot. Making this vision a reality will require time, effort and dedication, but we look
forward to growing our business while taking care of our people and protecting our culture. I am excited for the future of
our company, the opportunities that lie ahead, and the value we will create throughout our journey.
Craig Menear
March 22, 2018
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 28, 2018
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-8207
THE HOME DEPOT, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
2455 PACES FERRY ROAD, ATLANTA, GEORGIA 30339
(Address of principal executive offices) (Zip Code)
95-3261426
(I.R.S. Employer Identification No.)
Registrant’s Telephone Number, Including Area Code:
(770) 433-8211
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS
NAME OF EACH EXCHANGE
ON WHICH REGISTERED
Common Stock, $0.05 Par Value Per Share
New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
No
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
No
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or
for such shorter period that the Registrant was required to submit and post such files). Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated filer
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the
extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act.
Non-accelerated filer
Smaller reporting company
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
No
The aggregate market value of the common stock of the Registrant held by non-affiliates of the Registrant on July 30, 2017 was
$176.5 billion.
The number of shares outstanding of the Registrant’s common stock as of March 2, 2018 was 1,157,269,522 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s proxy statement for the 2018 Annual Meeting of Shareholders are incorporated by reference in Part III of
this Form 10-K to the extent described herein.
TABLE OF CONTENTS
Commonly Used or Defined Terms
Cautionary Statement Pursuant to the Private Securities Litigation Refo …
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