Financial Statements Paper Part II - Essay Example

here has been no reduction in equity of the company in year 2009 when compared with year 2008 so reduction in debt-equity ratio and debt ratio is attributed to lower debt component in year 2009. Lower debt-equity ratio reduces the risk of the company during difficult time as witnessed after the financial crisis of 2008. Major impact in the Home Depot’s performance has come in the form of interest coverage that has reduced in 2009 to just 6.98 times from the much safer coverage of 22.6 times in year 2008.

This has also reduced its capacity to borrow more funds for business expansion. As far as revenue is concerned, the company reported sales of $77.3 billion in 2008; it has decreased to $71.228 billion in 2009. The company’s sales are in downward trends. It is apparent that the company’s businesses have been affected by the economic recession that set in after financial crisis in 2008-09. This reduction in revenue has also affected its return on assets that decreased significantly to 5.34% in year 2009 from 9.

9% registered in 2008. Post 9/11 regulatory environment pertaining to information security has been quite rigorous. No company can afford to compromise with employee, customer and company data. Customers rely enormously on the company management and believe that their personal information and data will not get misused or compromised. It is true that any misappropriation of customer, employee or company data could endanger their reputation significantly resulting into financial losses apart from facing lawsuits by the affected people.

Zoning regulations prevent use of property in a certain manner. Zoning regulations mean conforming to local land and building regulations and conduct businesses conforming to local laws. Zoning regulations also imposes certain conditions such as providing adequate parking facilities, timing of operations for doing business activities. Thus, zoning ordinances may impact the business activities of the company’s store in