Home Depot Financial Report 2010 Part II 1.

Home Depots largest expense comes is Selling Expenses (operating and administrative), costing 16,902,000,000. While total revenue trended down from last year and the year before, earnings per share were up from 2008. MD&A explains that Home Depot implemented a guidance strategy to shut down 15 stores with impaired performance and abandon focus on specialty centers and services, regaining focus on its core serviced through Home Depot stores. 2. Retained Earnings increased by 1,133,000,000 for the period, due to costcutting and tighter control over loss. Dividends in the amount 1,525,000,000 of were reported. 3. Home Depots largest single asset is Buildings, worth 17,391,000,000 which totals 42.5% of total assets. MD&A reports that Home Depot has 13,900,000,000 in liquid assets and 10,363,000,000 in current liabilities, meaning the company has more than enough cash on hand to cover its debts, a tribute to the health of the organization. Further,

Current liabilities represent % of total liabilities Liabilities (liquidity and solvency) Home Depot sells common stock. Common stock is available to anyone on the open market, whereas Class B or Class A stock is a preferred stock, meaning in the event of a shut down, Class A and B stock would have preference in order of repayment of debt to common stock. 4. Net change in cash flows for this period is $902,000,000. Operations and Financing generated cash and Investing used cash. Home depot did not make any purchases of fixed assets. Home Depot did not issue any stock and debt in exchange for cash. 5. There are 9 notes in the financials. The notes include the information that Home Depot changed its inventory accounting method from FIFO to the Weighted Average Cost Method . 6. MD&A makes the following three important conclusions: y The conversion to the Weighted Average Cost Method of inventory accounting should because it hopes this method result in greater precision

in the costing of inventories and a better matching of cost of sales with revenue generated. y The restructuring of Home Depots distribution schedule, through the implementation of RDCs, or Rapid Deployment Centers, will increase efficiency, lower costs and help the firm meet its goal of expanded service through the USA, Canada and Mexico. Home Depot has created a line of approximately 4,000 eco-friendly products that meet specifications for energy efficiency, water conservation, healthy home, clean air and sustainable forestry, improving sales and corporate responsibility.