Financial Statement Analysis Essay

2000 Words May 17th, 2013 8 Pages
Home Depot, Inc.: 2011 10-K Analysis

Ralph Fisher III

Albright College: ACC 912

2/28/13 Final Project

The Home Depot, Inc. fiscal year for 2011 ended on January 31, 2012, and their 2011 10-K report was produced to the Securities and Exchange Commission thereafter. After review of the key financial statements, it was found that the balance sheet, income statement, cash flow statement, and stockholders’ equity statement remained consistent over the documented years. All figures reported below are in millions except for per share values, ratios, and percentages. The balance sheet reported on Home Depot’s 2011 10-K report analyzes both 2011 and 2010 fiscal years. The working capital for the two years amounted to $5,144 and
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The debt ratio for 2011 and 2010 amount to .56 and .53 respectfully, showing approximately one half of the total assets are funded by debts. The business appears to show an efficient mix of debts and investments to fund the total assets of the company in both years. Further review of the assets category found that the net value of Property and Equipment is approximately 60% and 63% in 2011 and 2010, showing a dedicated investment to long-term assets from the operating income generated. The slight decline in percentage can be attributed to the increase in accumulated depreciation and amortization, which is calculated on a straight-line basis. Based on the net income, the return on assets amounted to 9.6% in 2011 and 8.3% in 2010, showing an efficient gain on the company’s investment. The return on equity was determined to be 21.7% and 17.9% showing a respectful return to the investors of the company. The increase of $2,251 in Retained Earnings and $3,501 in Treasury Stock shows much of this return is invested back into the company, and into the aggressive stock buy-back program. The statement of income provides figures relating to 2011, 2010, and 2009, and shows a regular increase in Gross Profit and Net Income over that time. The return on sales was determined to be 5.52%, 4.91%, and 4.02% in 2011, 2010, and 2009 respectfully, showing a steady increase in return and better control of costs and expenses. The cost of sales as percentage of sales showed

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