The Home Depot Inc Consolidated income Statement For Fiscal Year ended (amounts

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The Home Depot Inc Consolidated income Statement For Fiscal Year ended (amounts in millions) 2/1/15 2/2/14 Net Sales $83,176 100.0% $78,812 100.0% Liquidity: COGS 54,222 65.2% 51,422 65.2% Current Ratio 1.36 Gross Profit 28,954 34.8% 27,390 34.8% Quick Ratio 0.28 Selling General & Admin 16,834 20.2% 16,597 21.1% Debt Deprec & Amort 1,651 2.0% 1,627 2.1%    Debt Ratio 0.77 Operating Income 10,469 12.6% 9,166 11.6%    Debt to Equity 3.29 Interest Income 337 0.4% 12 0.0%    Times Interest Earned 13.02 Interest Expense 830 1.0% 711 0.9%    Fixed-Payment Coverage Income taxes 3,631 4.4% 3,082 3.9% Activity Net Income $6,345 7.6% $5,385 6.8% Inventory Turn 4.89 EPS (basic) $4.74 $3.78 0.0% Average Collection Period 6.51 Average Payment Period 39.09 The Home Depot Inc Total Asset Turnover 2.08 Consolidated Balance Sheet Profitability as of (amounts in millions) Gross Profit Margin 0.35 2/1/15 2/2/14 Operating Profit Margin 0.13 Current Net Profit Margin 0.08    Cash $1,723 4.3% $1,929 4.8% Earnings Per Share 4.74    Receivables 1,484 3.7% 1,398 3.5% Return on Total Assets 0.16    Inventory 11,079 27.7% 11,057 27.3% Return on Equity 0.68    Other 1,016 2.5% 895 2.2% Market Ratios Total Current 15,302 38.3% 15,279 37.7% Price Earnings 23.40 PP&E (cost) 38,513 96.4% 39,064 96.4% Market/Book 20.94 Accum Deprec (15,793) -39.5% (15,716) -38.8% Goodwill 1,353 3.4% 1,289 3.2% Book Value per Share $5.30 Other 571 1.4% 602 1.5% Total Assets $39,946 100.0% $40,518 100.0% Current    Accounts Payable $5,807 14.5% $5,797 14.3%    Current portion of LT Debt 38 0.1% 33 0.1%    Accrued Liabilities 5,424 13.6% 4,919 12.1% Total Current 11,269 28.2% 10,749 26.5% Long Term Debt 19,355 48.5% 17,247 42.6% Total Liabilities 30,624 76.7% 27,996 69.1% Equity    Common Stock (par $.05) 88 0.2% 88 0.2%    APIC 8,885 22.2% 8,402 20.7%    Retained Earnings 26,995 67.6% 23,180 57.2%    Accumulated OCI (452) -1.1% 46 0.1%    Treasury Stock (26,194) -65.6% (19,194) -47.4% Total Stockholder's Equity 9,322 23.3% 12,522 30.9% Total Liabilities &
Stockholder's Equity $39,946 100.0% $40,518 100.0% Current Stock Price (May 26, 2015) = $110.93 Calculate for FYE 2/1/2015: 1. Liquidity Ratios (current, quick, and Cash ratios) 2. Debt Management Ratios (times interest earned (accrual), long-term-debt-
to-equity, debt-to-equity, debt-to-total assets) 3. Asset Efficiency Ratios (AR Turnover, Inventory Turnover, Asset Turnover) 4. Profitability Ratios (GP%, Net Profit Margin %, Return on Assets, Return on Equity) 5. Stockholder Ratios (EPS, PE ratio) The Home Depot Inc Consolidated income Statement For Fiscal Year ended (amounts in millions) 2/1/15 2/2/14 Net Sales $83,176 100.0% $78,812 100.0% Liquidity: COGS 54,222 65.2% 51,422 65.2% Current Ratio 1.36 Gross Profit 28,954 34.8% 27,390 34.8% Quick Ratio 0.28 Selling General & Admin 16,834 20.2% 16,597 21.1% Debt Deprec & Amort 1,651 2.0% 1,627 2.1%    Debt Ratio 0.77 Operating Income 10,469 12.6% 9,166 11.6%    Debt to Equity 3.29 Interest Income 337 0.4% 12 0.0%    Times Interest Earned 13.02 Interest Expense 830 1.0% 711 0.9%    Fixed-Payment Coverage Income taxes 3,631 4.4% 3,082 3.9% Activity Net Income $6,345 7.6% $5,385 6.8% Inventory Turn 4.89 EPS (basic) $4.74 $3.78 0.0% Average Collection Period 6.51 Average Payment Period 39.09 The Home Depot Inc Total Asset Turnover 2.08 Consolidated Balance Sheet Profitability as of (amounts in millions) Gross Profit Margin 0.35 2/1/15 2/2/14 Operating Profit Margin 0.13 Current Net Profit Margin 0.08    Cash $1,723 4.3% $1,929 4.8% Earnings Per Share 4.74    Receivables 1,484 3.7% 1,398 3.5% Return on Total Assets 0.16    Inventory 11,079 27.7% 11,057 27.3% Return on Equity 0.68    Other 1,016 2.5% 895 2.2% Market Ratios Total Current 15,302 38.3% 15,279 37.7% Price Earnings 23.40 PP&E (cost) 38,513 96.4% 39,064 96.4% Market/Book 20.94 Accum Deprec (15,793) -39.5% (15,716) -38.8% Goodwill 1,353 3.4% 1,289 3.2% Book Value per Share $5.30 Other 571 1.4% 602 1.5% Total Assets $39,946 100.0% $40,518 100.0% Current    Accounts Payable $5,807 14.5% $5,797 14.3%    Current portion of LT Debt 38 0.1% 33 0.1%    Accrued Liabilities 5,424 13.6% 4,919 12.1% Total Current 11,269 28.2% 10,749 26.5% Long Term Debt 19,355 48.5% 17,247 42.6% Total Liabilities 30,624 76.7% 27,996 69.1% Equity    Common Stock (par $.05) 88 0.2% 88 0.2%    APIC 8,885 22.2% 8,402 20.7%    Retained Earnings 26,995 67.6% 23,180 57.2%    Accumulated OCI (452) -1.1% 46 0.1%    Treasury Stock (26,194) -65.6% (19,194) -47.4% Total Stockholder's Equity 9,322 23.3% 12,522 30.9% Total Liabilities &
Stockholder's Equity $39,946 100.0% $40,518 100.0% Current Stock Price (May 26, 2015) = $110.93 Calculate for FYE 2/1/2015: 1. Liquidity Ratios (current, quick, and Cash ratios) 2. Debt Management Ratios (times interest earned (accrual), long-term-debt-
to-equity, debt-to-equity, debt-to-total assets) 3. Asset Efficiency Ratios (AR Turnover, Inventory Turnover, Asset Turnover) 4. Profitability Ratios (GP%, Net Profit Margin %, Return on Assets, Return on Equity) 5. Stockholder Ratios (EPS, PE ratio)

Explanation / Answer

1. Current ratio = current assets/current liabilities = 15302/11269 = 1.357

Quick ratio = (current assets-inventories)/current liabilities = (15302-11079)/11269 = 0.374

Cash ratio = cash equivalents/current liabilities = 1723/11269 = 0.152

2. times interest earned = profit before interest and taxes/interest = 10469/830 = 12.61

long term debt to equity ratio = 19355/9322 = 2.076

debt to total assets = 19355/39946 = 0.484

3. AR turnover = sales/average accounts receivable = 83176/average (1484,1398) = 57.72

Inventory turnover = sales/average inventory = 83176/average (11079,11057) = 7.51

asset turnover = sales/average assets = 83176/average (39946,40518) = 2.07

4. GP% = gross profit/sales = 28954/83176 = 0.348

Net profit margin = net profit/sales = 6345/83176 = 0.076

ROA = net profit/average assets = 6345/average (39946,40518) = 15.77%

ROE = net profit/average equity = 6345/average (9322, 12522) = 58.09%

5. EPS = Net income/no. of shares

no. of shares = 88/0.05 = 1760. so EPS = 6345/1760 = 3.605

P/E = Price per share/EPS = 110.93/3.605 = 30.77

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