Profit margin on sales

Financial Statement Ratio Analysis

Financial statement analysis of Home Depot

  1. Write a high level financial statement analysis that identifies two or three key accounts that bear further investigation. (i.e. Inventory, LTD, other assets)
  2. Identify which ratios (if not all the ratios) will be selected for the analysis.  Each class must be presented as part of the case. The ratio analysis should show at least 3 periods in order to properly develop performance patterns. The use of charts, tables and graphs is encouraged to present the data for analysis.
  3. Within each class, a conclusion on overall context of the ratio analysis, there must be a logical integration of the significant accounts identified in the financial statement review to the selected ratios.
  4. Present an overall conclusion based solely on the overall financial performance presented  on the relative strength of the company. Based on the financial performance of the company, as presented in the ratio analysis recommend to sell, hold or buy stock in the company.

Example outline:

  1. Financial statement (Balance sheet, Income Statement and Cash Flow statement) key account identification.
  2. Ratio analysis, by class: What each ratio tells us?
    1. Liquidity
      1. Current
      2. Quick
    2. Asset Management
      1. Days sales outstanding
      2. Inventory turnover
      3. Total assets turnover
    3. Debt Management
      1. Debt to assets ratio
      2. Times interest earned
    4. Profitability
      1. Profit margin on sales
      2. Return on total assets
      3. Return on common equity
    5. Market Value
      1. Price/Earnings
      2. Market/Book
  3. Explain each ratio
  4. Conclusion with reason

-NYQ Follow

91.89 Down0.45(0.49%) 4:00PM EDT

|After Hours : 91.80 Down0.09 (0.10%) 7:06PM EDT

The Home Depot, Inc. (HD)

Top of Form

Bottom of Form

Income Statement

View: Annual Data | Quarterly Data

All numbers in thousands

Period Ending

Feb 2, 2014

Feb 3, 2013

Jan 29, 2012

Total Revenue

78,812,000  

74,754,000  

70,395,000  

Cost of Revenue

51,422,000

48,912,000

46,133,000

Gross Profit

27,390,000  

25,842,000  

24,262,000  

Operating Expenses

Research Development