Appendix A Home Oepot 200s Financia! StatementS
THEHOMEDEPOTINC.AND5UBMDIARI£SC DNSOLIDATED STATEMENTS OF EARNINGS
£'iscaI Veal I2nded”’
amounts in millions, except per shore data | January 3t, 2010 | February 1, 2009 | February 3, 2008 |
NET SALES | $ £fi,176 | $ 71,288 | $ 77,349 |
Cost of Sales | 43,764 | 47,298 | 51,352 |
GROSS PROr-IT | 22,412 | 23,990 | 25,997 |
Operating Expenses: | |
Selling. General and Administrative | 15,902 | 17,846 | 17,053 |
Depreciation and Amortization | 1,707 | t,78S | 1,702 |
Total Operating Expenses | 17,609 | 19,631 | 18755 |
OPERATING TNCOME | 4,803 | 4,359 | 7,242 |
Interest and Other (Income) Expense: | |
Interest and Investment Income | (18) | (18) | {74) |
Interest Expense | 676 | 624 | 696 |
Other | 163 | 163 |
Interest and Other, net | 821 | 769 | 622 |
EARNINGS FROM CONTINUING OPER/¥TIONS BEFORE |
PRDVISION FOR INCOME TAXES | 3,982 | 3,590 | 6,620 |
Provisinn for Income Taxes | 1,362 | 1,27g | 2410 |
EARNINGS FROM CONTINUlNtS OPERATIONS | 2,620 | 2,312 | 4,210 |
EARNINGS (LOSS) FROiYt DISCONTINUED OPERATIONS, | |
NET OF TAX | 4t | (52) | 185 |
NET EARNINGS | S 2,6G1 | $ 2,260 | $ 4,395 |
Weighted Average Conjmojj Shares BASIC EARNINGS PER SFL9DE FROM CONTINUING | 1,683 | 1,682 | 1,849 |
OPERATIONS | S | 1.56 | $ 1.37 | $ 2.28 |
BASIC EARNINGS (LOSS) PER SHARE FROM DISCONTINUED |
OPERATEONS | $ 0.02 | $ (0.03) | $ 0.10 |
BASIC EARNINGS PER SHnRE | $ 1.58 | $ 1.34 | $ 2.3P |
Diluted Weighted Average Common Shares | 1,692 | 1,686 | 1,856 |
DILUTED EARNINGS PER SHARE FROM CONTINUING | |
OPERATIONS DILUTED EARNINGS (LOSS) PER SHARE FROM |
DISCONTINUED OPERATIONS | $ 0.02 | $ (0.03} | $ 0.10 |
DILUTED EARNINGS PER SHARE | $ 1.57 | $ 1.34 | $ 2.37 |
{1) Fiscnf yeors ended
lonuory 31 , 2010 and Februnp i,
z0og include 52 weeks. Fiscal yeor ended February 3, 2008 includes S3 weeks.See
accomponving Notes
to Consolidoted Financiol
Statements
. A-4
Appendix A Home Depot 2009 Financial Statements
THE HOME DEPOTs INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
emcents in millions, except ch•re ondper shore data ASSETS
Current Assets:
Cash and Cash Equivalents Short-Term Investments Receivables, net Merchandise Inventories Other Current Assets
Total Current Assets Property and Equipment, at cost:
Land Buildings
Ftimimre, Fixtures and Equipment Leasehold Improvements Construction in Progress
Capital LeasGs
Less Accumulated Depreciation and Amortization Net Property and Equipment
Notes Receivable Goodwill
Other Assets Total Assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts Payable
Accused Salaries and Related Expenses
Sales Taxes Payable Deferred Revenue Income Taxes Payable
Current Installments of Long-Term Debt Other Accused Expenses
Total Current Liabilities
Long-Term Debt, excluding current installments Other Long-Term Liabilities
Deferred Income Taxes Total Liabilities
STOCKHOLDERS’ EQUITY
Common Stock, par val ue $0.05; authorized: 10 billion shares; issued: 1.716 billion
January 31,
2010
964
1,321
11,795 1 11,? 1
25,550 2t›,.! \ t
$ 40,877 $ 41, 1 i › 1
10,363 l l, 1 i
21,484 23,38 '
shares at January 31, 2010 and 1.707 bill ion shares at February 1, 2009; outstanding: 1.698 billion shares at January 31, 2010 and 1.696 billion shares at February 1, 2009 | 86 |
Paid-In Capital | 6,304 | fi,04h |
Retained Earnings | 13,226 | 12,09.i |
Accumulated Other Compfehensive Income (Loss) Treasury Stock, at cost, I b million shares at January 31, 2010 and 11 million shares at | 362 | t77 i |
February 1, 2009 | (585) | (372a |
Total Stockholders’ Equity | 19,393 | 17,777 |
Total Liabilities and Stockholders' Equity | 877 | S 41, if›4 |
See accompanying Notes in Consolidated Financial Statements'. |
Appandix A Home Depot 2009 Financia! Statements
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME
A-5
Accumulated
Other Total
Common S*oc
oze ouu^ in millionc, except yer sh-
e deka Shares Anieunt C ital r
Sbara Amount Income
BALANCE 7xNUARY XXXXXXXXXXS XXXXXXXXXX
Cumulati› e Effect of the Adoption of
FH 4B 12 | 1 | 239 | 4,395 | — | — | 240 | 4,395 | — | — | 4 | — | — | 4 | 45fi | — | 455 | 455 | (10) | — | (10) | (10) | — | — | 206 | — | 206 | — (292) | (10,815) | (10i815) | (735) | f37) | (2,6(18) | (24,239) | — 735 | 26,884 | — | (1,709) | (l,7ô9) | 29 | | |
’ “ Net Earnings Shares Issued Under Employee Stock Plans
Tax Effect où Sale of Option Shane by
.' Employées
: TrdnS|£lt1On Adj Il 8tlbentg
Cash filow Hedgei, net of iax
Stock Options, Awards and Amortization
" of Restricted Biock
Repurcbase of Cominon Stock Retirement ot‘ Trensury Stock Cash Dividends ($0.90 per share) Other
FEBRUARY XXXXXXXXXX
8 | S | 85 | S | 7 | 4 | 7 7 4 | — | — | 2,260 | — — | 2,260 | $ 2,260 | — | 68 | . | 68 | (83 1) | — — - | 7 (83î) | (831) | (\) | (} | (1) | | |
Net Eernings Shares lssued Under Pmployoe Stock Plans .
Tax Effect of Sale où Option Shares by
' Emp1o'yees
Tnnslation Adjustmejjts
.,.'.':.' Cash Plow Hedges, net of fax
Stock t/tirins. Awards and Atnortizatir›n uf Restricted Stock
Repv‹::hawofûomœanSxk Cxh Divd dmSUO0 shæe
' Odur
C'ompreliensive Incarne
- - L21)
— — C3 (34)
-- — 12
176
(70)
(1.52 i)
(g$)
Net
fiamitt s —— — . 2,667 — — 2,S6J $
g › | 57 | — | — | ›• | — 426 | — — | (2) 42fi | 426 | — | 11 | 11 | — — | 201 | 20i | — | XXXXXXXXXXi | (213) | | |
5hares Issued Under Emplöyee Stock Plan'
Tax Rituel of Safe of Option Shnres by
En›ployeer TrBnsletion Adju6tments
Cash Flow Hedges, nel of tax
Stock Options, Awerds and AmoTtisatior\
of Restnctod Stock
ltepurcbase of C’ommon Stock
2,661
Cash Dividende ($0.90 per share) OihComprehmsive Incoine
— (1,525)
- — (3)
— — (1,525)
f1)
2
3,100
A-6
Appendix A Home Depot
2009 Financial Statements .
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS . .
CASH FLOWS FROM OPERATING ACTIVITIES:
Jenaa 31,
2010Fiscal Year Ended*" February 1,
XXXXXXXXXXNet Earnings Reconciliation of Net Earnings to Net Cash Provided by Operating Activities:
$
2,661 $ 2,260 Depreciation and Amortization
Impairment Related to Rationalization Charges Impairment of lnvestmgnt
Stock-Based Compensation Expense
Changes in Assets and Liabilities, net of the effects of acquisitions and disposition: (Increase) Decrease in Receivables, net Decrease (Increase) in Merchandise Inventories Decrease (Increase) in Other Current Assets
Increase (Decrease) in Accounts Payable and Accrued Expenses Decrease in Deferred Revenue
(Decrease) Increase in Income Taxes Payable Decrease in Deferred Income Taxes.
(Decrease) Increase in Other Long-Term Liabilities
Other
Net Cash Provided by Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures, net of $10, $37 and $19 of non-cash capital
.expenditures in fiscal 2009, 2008 and 2007, respectively Proceeds from Sale of Business, net
Payments for Businesses Acquired, net
1,806163
201
(23)
625
4
59
(21)
(174}
(227) (I9
70:
51Z5(966)
1,902
580
) 63
176
262
(282)
306
242
5,528
(1,847)
( I .i ) Proceeds from Sales of Property and Equipment Purchases of Investments
Pmceeds from Sale and Maturities of Investments
Net Cash (Used in) Provided by Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES:
178
XXXXXXXXXX
(168) (l 1,225 I (Repayments of) Proceeds from Short-Term Borrowings, net Repayments of Long-Term Wbt
Repurchases of Common Stock Proceeds from Sales of Common Stock Cash Dividends Paid to Stockholders Other Financing Activities
Net Cash Used in Financing Activities Incregse (Decrease) iri Cash and Cash Equivalents
Effect of Exchange Rate Changes on Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year
SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS MADE FOR:
— ( 1, XXXXXXXXXX
’(1, XXXXXXXXXXf*t ›
XXXXXXXXXXtl0,Si5i
73 84 27t›
ti,szsj ti,szi) ii,r›'»
128 ( 1
XXXXXXXXXXI
XXXXXXXXXX)
XXXXXXXXXXUJ
Interest. net of interest capitalized | $ 664 | $ 622 | $ 67* |
Income Taxes | $ 2,082 | $ 1,265 | $ 2,524 |
(1) Fiscal years ended January 31, 2010 and Februai y I , 20ñ9 include 52 weeds. fiscal
year ended
February 3 , 2OCR includes 53 weeks'.See Notes to Finyncial ' t07 EXERCISE 8.13
inventory Turnover
Chapter B Inventories and the Cost of
Goods Sold
- Indicate whether each uf the following financial measurements would have been higher: /‹›it r# or un‹iffected had Ford Motor Company used FIFO instead of LIFO. Explain thC reas‹›llll@ . behind your answers.
- Stress profit rate.
- Reported net income.
- Current ratio (Ford’s current ratio is greater than I to 1).
- Inx'entury turnover rate.
- Accounts receivable turnover rate.
- Cth payments made to suppliers.
- Nei cash flow’ from operations (Ford’s operating cash flows are positive).
- Provide 5o«r own assessment of whether using LIFO has made Ford Motor t oinpan v rat re or less ( 1) liquid and (2) well-off. Defend your answcrs.
A recent annual repon of Kraft Punds, Inc., reveals the following infurrñation (dollar amount,s ure stated in millions XXXXXXXXXXCost of goods sold . . . Inventory (beginning of year)
\rrven\ory {end of year) . . .
Average time required to collect accounts receivable . . . .
$24,66 I
3,506
4,096
45 days
- Compute Krafi’s inventory turnover for the year (round to nearest tenth).
- Compute the number of days required by' Kraft tc sell its average inventory (round to thy nearest day).
- What is the length of Kraft's operating rvcle?
- What comparative information would you want to be able to evaluate Kraft’s operating cycle figure?
I87 EXERCISE 8.14
Inventory Analysis
” IJI7 E XERCTS E 8.15
Using the Fi
ef
Home. ’-..,.:,. Oepot, Inc.
A recent income statement of
Walmart reports sales of $405,046 million and cost of goods sc›iil of $304,657 million for the year ended January 31, 2010. The comparable sales and co.st of goo‹ls sold figures for the year ended one year earlier were S40I,0S7 million and $304,056 million, respectively, As you would expect, to be able to achieve this high lex'e1 of sales, a great deal c›l inventory must be maintained so that customers wfll find what they want to buy whcn they shop in
Walmart stores. In fact, in the January 31, 2010, balance sheet, inventory is presented at $33. i6tl million and the comparable figure for a year earlier is $34,51 I million.
- Compute the inventory turnover for Walmart for boih years.
- Compute the average numHr of days required by Walmart to sell its inventory for the same years.
- In w’hich year was the company more efficierlt in its manageme;u of inventoy ‘? Explain your
The
Home Depot, Inc., financial statements appear in Appendix A at the end of this textbook. Using figures from the income statement and balance sheet. answer the following questions:
- What was the company 's inventory turnover for the most recent year reported ?
- Using your answer from part a, what was the averagc number of days that merchandise remained in inventory before it was sold?
' °; . .. g c. Is the company's operating cycle influenced significanily hy its accounts receivable turnover
rate? Explain.