Home Depot Inc - Coursework Example

Part I Home Depot is Inc. is a leading company in providing home improvement, building material and home services including lawn and gardening services to the customers. These services include carpeting, flooring, air system, cabinets, shelves and other home furnishing services. The products namely as Do-it-yourself and Do-it-for-me are quite famous. The organization is a corporation and listed in New York Stack Exchange (NYSE: HD) and is a constituent of Dow Jones Industrial Average (DJIA). The company has around more than 2250 retail outlets all over the world such that the company has its presence across 50 states of United States, Canada, Mexico, China, Columbia, Virgin Islands and other countries.

The company started off its operations from 1978, as of now the company has been in the business for more than 34 years. The company has its physical appearance in the form of retail outlets as well as having a building location in Atlanta, Georgia. The legal state of the Home Depot is of corporation and the company operates as public limited company. Apparently from the company’s last year’s annual report of 2010, there is no litigation that has been found. So it seems as if the company has been tackling its issues quite smoothly without any serious legal proceedings.

As part of the future outlook of the company, the executives of the company are pretty much hopeful with the growth due to healing from the recession. The company expects good financial results as well as growth in its number of outlets in upcoming periods. Part II Ratios       2010 2009 Current Assets = Current Assets - Inventories = 13479 - 10625 0.28 13900 - 10188 0.36   Current Liabilities 10122 10363       Debt to Equity = Debt = 8707 46.10% 8662 44.67%   Equity 18889 19393       Net Profit Margin = Net Profit = 5338 7.

85% 2620 3.96%     Sales   67997   66176   Trend Analysis 2010 2009 2008 2007 2006 Net Income 3,338 2,620 2,312 4,210 5,266 Growth 27.40% 13.32% -45.08% -20.05% - From the above tables, three basic ratios and net income trend analysis has been carried out. It can be observed that the current ratio of Home Depot has been decreased by 0.08 times in 2010 as compare to 2009 which is a concerning issue to the company. Debt to equity ratio of Home Depot has also increased from around 44% to 46% which is another alarming sign for the company as company is becoming more risky.

But the most important feature to note that is a substantial increase in the net profit margin from around 4% to nearly 8% which shows that the company has performed remarkably well and increased its profit by a double margin. From the trend analysis over the period of 5 years, it can be seen that due to recession, the company experienced high negative growth in its net income however the company started recouping all what it lost in the recession such that the growth in the net income is phenomenal especially in the last two years.

References Brigham, Eugene F. and Ehrhardt, Michael C., (2008). Financial management: theory and practice. 12th ed. New York: Cengage Learning.