Calculate ROI for January 28, 2018 and January 29, 2017. Round to 1 decimal plac

Question

Calculate ROI for January 28, 2018 and January 29, 2017. Round to 1 decimal place, i.e. xx.x%. (Total assets at 1/31/16 amounted to $41,973 in millions) and Calculate ROE for January 28, 2018 and January 29, 2017. (Total stockholders’ equity at 1/31/16 amounted to $6,316 in millions).  

THE HOME DEPOT, INC CONSOLIDATED BALANCE SHEETS Januory23,Ja 207 in mitlions, except per share data Current assets: Cash and cash equivalents Recelvables, net Merchandise inventories Other current assets $ 3.595 $2,538 1,952 2,029 12,748 12,549 608 18,933 17,724 22,075 21,914 2,275 2,093 1,235 $ 44,529 42,966 638 Total current assets Net property and equipment Other assets 1,246 Total assets Liabilities and Stockholders Equity Current liabilities: Short-term debt Accounts payable Accrued salaries and related expenses Sales taxes payable Deferred revenue Income taxes payable Current installments of long-term debt Other accrued expenses 1,559 710 7.244 7,000 1,640 1,484 508 1,805 1,669 25 542 2,195 16,194 14,133 24,267 22,349 296 1,855 43,075 38,633 520 54 1,202 2,170 Total current liabilities Long-term debt, excluding current installments Deferred income taxes Other long-term labilities 440 2,174 Total liabiities Common stock, par value $0.05: authorized: 10,000 shares; issued: 1,780 shares at January 28, 2018 and 1,776 shares at January 29, 2017 Paid-in capital Retained earmings 10,192 9,787 39,935 35,519 (566) (867) Treasury stock, at cost, 622 shares at January 28, 2018 and 573 shares at January 29, 2017 Total stockholders equity Total iabilities and stockholders' equity (48,196) (40,194) 4,333 44,529 S 42,966 See accompanying notes to consolidated financial statements

Explanation / Answer

**Return on Investment = ROI = Net income after interest and taxes ÷ average Total assets

Average total asset = (Opening total assets + Closing total assets) ÷ 2

Average total assets for the year ended on Jan 29, 2017 = ($41,973 million + $42,966 million) ÷ 2

= $42,469.5 million

Average total assets for the year ended on Jan 29, 2018 = ($42,966 million + $44,529 million) ÷ 2

= $43,747.5 million

**Retun on Equity = ROE = Net income ÷ average Total Shareholders Equity

Avg. total shareholders equity =(Ope. Shareholders equity + Clo. Shareholders equity) ÷ 2

  Avg. total shareholders equity (Year ended on Jan 29, 2017) = ($6,316 million + $4,333 million) ÷ 2

= $5,324.5 million

Avg. total shareholders equity (Year ended on Jan 28, 2018) = ($4,333 million + $1,454 million) ÷ 2

= $2,893.5 million

  

Calculation of ROI and ROE

Jan 28, 2017 Jan 29, 2017 a. Net income $8,630 million $7,957 million b. Average Total assets $43,747.5 million $42,469.5 million c. Average Total Shareholders Equity $2,893.5 million $5,324.5 million Return on Investment (a ÷ b) 19.7% 18.7% Return on Equity (a ÷ c) 298.2% 149.4%

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