Phase 5 Individual Project 5 - Coursework Example

The global spread is due to its superior quality brand that meets consumers’ tastes and preferences and high reputation in customer service delivery a critical factor that its competitors lack. Currently, the firm is the fourth largest retailers in world. Profitability being one of the main objectives that guarantee sustainability and growth of an organization, Home Depot is trading at a profit. This is showed by an increase in the Net sales from $78.8Billion in the year 2013 to $83.2Billion in 2014.

The net earnings scaled up from $4.5Billion in 2012 to $5.4Billion in 2013 and finally to $6.3Billion in 2014. Additionally, the store count also improved from 2256 in 2012 to 2263 in 2013 to 2269 in 2014. This result indeed shows that the firm will continue operating at a profit for unforeseen future pursuant to the basis of a going concern (The home depot, 2015). For the purposes of financing its internal activities and investments, the firm preferred long-term debt because of the tax shield that is tied up in the debt.

The total amount of debt that is spent by the enterprise is $16.869Billion. The huge sum loan was due to the decrease in its assets by $572Million, decrease in shareholders equity by $572Million, an increase in accounts payable by approximately $10Million all from February 2014 to February 2015. However, this is not an issue to shareholders as Home Depot’s statement of cash flows clearly indicates that the cash and cash equivalents have been increasing. This is evidenced by an increase in cash from operation from 6975 in 2013 to 7628 in 2014 and 8242 in 2015.

The cash from investing activities increased from 1432 to 1507 and 1271 from the year 2013 to 2015 respectively. The cash from financing activities scaled up from 50354 in 2013, to 6652 in 2014 and 7071 in 2015. This stipulates that the cash and cash equivalents have been increasing substantially and, therefore,