Brief Description
Home Depot is one of the prominent and successful retailing companies in the United States. In particular, the company deals with the provision of home improvement supplies including tools, construction merchandises, kitchen appliances and the like. One of the key elements impelling Home Depot’s success is its financial strategy. The main financial strategy of the company is cost minimization. On the basis of the cost leadership generic strategy, the company’s financial goal is cost minimization. Moreover, the strategic goal and objective of Home Depot encompassing the development of close and special affiliations with suppliers aid the firm in accomplishing cost minimization (Smithson, 2017).
Total Assets, Total Liabilities and Total Stockholders’ Equity Comparison
In accordance to the balance sheets for the two financial years, the total assets of the company decreased from $41,164 to $40,877 whereas the total liabilities also declined from $23,387 to $21,484. I believe that the change of each category is larger because it is linked to a significant decline in the net property and equipment amount. In comparison to other companies within the industry, Home Depot’s financial performance is poorer.
Income Statement Comparison
Compare the following income statement accounts between 2009 and 2008. How does a change for each account impact net income?
1. Net sales
A change in the net sales of the company without doubt influences the generated net income. An increase in the net sales implies that the net income will increase whereas a decline in the net sales implies that the net income will also decline. For instance, in the case of Home Depot, the net sales decreased from $77,349 to $71,288, which caused a decline in the net income from $4,395 to $2,260.
2. Cost of goods...
References
Smithson, N. (2017). Home Depot’s Generic Strategy, Intensive Growth Strategies. Panmore Institute.
Financial Research Report: Home Depot For stakeholders and investors, financial analysis is of great importance as it enables them to evaluate and assess a company's performance and financial health from different perspectives. One of the important aspects is financial ratios deemed important in the financial analysis of a company. Financial ratio analysis encompasses different aspects of business performance for instance profitability, efficiency, leverage, liquidity and so on. This financial research report
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Financial Analysis: Home Depot Summary of Operations Net Sales Gross Margin Operating Margin Income before Taxes Net Income Financial Position Working Capital Property, Plant and Requirement Total Assets Long-Term Assets Stockholders' Equity Financial Ratio Analysis and Interpretation Historical View of Financial Performance Competitor and Industry Standards Comparison The relevance of subjecting the financial statements of a company to intensive analysis cannot be overstated. This is more so the case given that the information obtained from such an analysis comes in handy in the determination of a
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