Using Home Depots balance sheet and income statement, fiscal year 2012, to calcu
ID: 2382156 • Letter: U
Question
Using Home Depots balance sheet and income statement, fiscal year 2012, to calculate the following:
o Current ratio
o Acid-test, or quick, ratio
o Receivables turnover
o Inventory turnover
Show your calculations for each ratio.
Income Statement and Balance Sheet Are provided below, if that is too hard to read, here is a link to the balance sheet and income statement, the link is much easeir to read, just make sure you click the "annually" icon, it pulls up automatically as quarterly.
https://www.google.com/finance?q=NYSE:HD&fstype=ii
INCOME STATEMENT:
In Millions of USD (except for per share items) 53 weeks ending 2013-02-03 52 weeks ending 2012-01-29 52 weeks ending 2011-01-30 52 weeks ending 2010-01-31
Revenue 74,754.00 70,395.00 67,997.00 66,176.00
Other Revenue, Total - - - -
Total Revenue 74,754.00 70,395.00 67,997.00 66,176.00
Cost of Revenue, Total 48,912.00 46,133.00 44,693.00 43,764.00
Gross Profit 25,842.00 24,262.00 23,304.00 22,412.00
Selling/General/Admin. Expenses, Total 16,508.00 16,028.00 15,849.00 15,902.00
Research & Development - - - -
Depreciation/Amortization 1,568.00 1,573.00 1,616.00 1,707.00
Interest Expense(Income) - Net Operating - - - -
Unusual Expense (Income) 0.00 - - -
Other Operating Expenses, Total - - - -
Total Operating Expense 66,988.00 63,734.00 62,158.00 61,373.00
Operating Income 7,766.00 6,661.00 5,839.00 4,803.00
Interest Income(Expense), Net Non-Operating - - - -
Gain (Loss) on Sale of Assets - - - -
Other, Net 67.00 0.00 -51.00 -163.00
Income Before Tax 7,221.00 6,068.00 5,273.00 3,982.00
Income After Tax 4,535.00 3,883.00 3,338.00 2,620.00
Minority Interest - - - -
Equity In Affiliates - - - -
Net Income Before Extra. Items 4,535.00 3,883.00 3,338.00 2,620.00
Accounting Change - - - -
Discontinued Operations - - - -
Extraordinary Item - - - -
Net Income 4,535.00 3,883.00 3,338.00 2,661.00
Preferred Dividends - - - -
Income Available to Common Excl. Extra Items 4,535.00 3,883.00 3,338.00 2,620.00
Income Available to Common Incl. Extra Items 4,535.00 3,883.00 3,338.00 2,661.00
Basic Weighted Average Shares - - - -
Basic EPS Excluding Extraordinary Items - - - -
Basic EPS Including Extraordinary Items - - - -
Dilution Adjustment 0.00 - - -
Diluted Weighted Average Shares 1,511.00 1,570.00 1,658.00 1,692.00
Diluted EPS Excluding Extraordinary Items 3.00 2.47 2.01 1.55
Diluted EPS Including Extraordinary Items - - - -
Dividends per Share - Common Stock Primary Issue 1.26 1.04 0.94 0.90
Gross Dividends - Common Stock - - - -
Net Income after Stock Based Comp. Expense - - - -
Basic EPS after Stock Based Comp. Expense - - - -
Diluted EPS after Stock Based Comp. Expense - - - -
Depreciation, Supplemental - - - -
Total Special Items - - - -
Normalized Income Before Taxes - - - -
Effect of Special Items on Income Taxes - - - -
Income Taxes Ex. Impact of Special Items - - - -
Normalized Income After Taxes - - - -
Normalized Income Avail to Common - - - -
Basic Normalized EPS - - - -
Diluted Normalized EPS 3.00 2.47 2.00 1.57
BALANCE SHEET
In Millions of USD (except for per share items) As of 2013-02-03 As of 2012-01-29 As of 2011-01-30 As of 2010-01-31
Cash & Equivalents 2,494.00 1,987.00 545.00 1,421.00
Short Term Investments - - - -
Cash and Short Term Investments 2,494.00 1,987.00 545.00 1,421.00
Accounts Receivable - Trade, Net 1,395.00 1,245.00 1,085.00 964.00
Receivables - Other - - - -
Total Receivables, Net 1,395.00 1,245.00 1,085.00 964.00
Total Inventory 10,710.00 10,325.00 10,625.00 10,188.00
Prepaid Expenses - - - -
Other Current Assets, Total 773.00 963.00 1,224.00 1,327.00
Total Current Assets 15,372.00 14,520.00 13,479.00 13,900.00
Property/Plant/Equipment, Total - Gross 38,491.00 38,975.00 38,385.00 37,345.00
Accumulated Depreciation, Total -14,422.00 -14,527.00 -13,325.00 -11,795.00
Goodwill, Net 1,170.00 1,120.00 1,187.00 1,171.00
Intangibles, Net - - - -
Long Term Investments - - - -
Other Long Term Assets, Total 333.00 295.00 260.00 223.00
Total Assets 41,084.00 40,518.00 40,125.00 40,877.00
Accounts Payable 5,376.00 4,856.00 4,717.00 4,863.00
Accrued Expenses 3,471.00 3,320.00 3,173.00 3,214.00
Notes Payable/Short Term Debt 0.00 0.00 0.00 0.00
Current Port. of LT Debt/Capital Leases 1,321.00 30.00 1,042.00 1,020.00
Other Current liabilities, Total 1,294.00 1,170.00 1,190.00 1,266.00
Total Current Liabilities 11,462.00 9,376.00 10,122.00 10,363.00
Long Term Debt 9,475.00 10,758.00 8,707.00 8,662.00
Capital Lease Obligations - - - -
Total Long Term Debt 9,475.00 10,758.00 8,707.00 8,662.00
Total Debt 10,796.00 10,788.00 9,749.00 9,682.00
Deferred Income Tax 319.00 340.00 272.00 319.00
Minority Interest - - - -
Other Liabilities, Total 2,051.00 2,146.00 2,135.00 2,140.00
Total Liabilities 23,307.00 22,620.00 21,236.00 21,484.00
Redeemable Preferred Stock, Total - - - -
Preferred Stock - Non Redeemable, Net - - - -
Common Stock, Total 88.00 87.00 86.00 86.00
Additional Paid-In Capital 7,948.00 6,966.00 6,556.00 6,304.00
Retained Earnings (Accumulated Deficit) 20,038.00 17,246.00 14,995.00 13,226.00
Treasury Stock - Common -10,694.00 -6,694.00 -3,193.00 -585.00
Other Equity, Total 397.00 293.00 445.00 362.00
Total Equity 17,777.00 17,898.00 18,889.00 19,393.00
Total Liabilities & Shareholders' Equity 41,084.00 40,518.00 40,125.00 40,877.00
Shares Outs - Common Stock Primary Issue - - - -
Total Common Shares Outstanding 1,484.00 1,537.00 1,623.00 1,698.00
Explanation / Answer
Data used for calculation is As of 2013-02-03
The ratios are calculated as below:
Current Ratio = Current Assets / Current Liabilities
= 15,372.00 / 11,462.00
= 1.34
Quick Ratio = (Current Assets - Inventories) / Current Liabilities
= (15,372.00 - 10,710.00) / 11,462.00
= 0.41
For calculation of average receivables and inventories, balance sheet As of 2012-01-29 and As of 2013-02-03 have been referred.
Receivables Turnover Ratio = Total Revenue / Average Receivables
= Total Revenue / ((Opening Receivables + Closing Receivables) / 2)
= 74,754.00 / ((1,245.00 + 1,395.00)/2)
= 74,754.00 / 1,320.00
= 56.63 times
Inventory turnover Ratio = Cost of Revenue / Average inventory
= Cost of Revenue / ((Opening Inventory + Closing Inventory) / 2)
= 48,912.00 / ((10,325.00 + 10,710.00) / 2)
= 48,912.00 / 10,517.50
= 4.65 times
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