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| For HOME DEPOT do the following: |
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Obtain the fiscal 2021 annual report at: |
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https://ir.homedepot.com/~/media/Files/H/HomeDepot-IR/2022/2021_AnnualReport_IR_Site_FINAL.pdf |
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Provide the following from the January 30, 2022 financial statements in the blue box provided. |
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From the CONSOLIDATED BALANCE SHEETS |
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I. |
What is the accounting equation? |
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January 30, 2022 |
January 31, 2021 |
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Total Assets = |
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Total Liabilities + |
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Total shareholders' (deficit) equity |
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What story does the results of the accounting equation tell? |
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Detail the components of Stockholder's Equity: |
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January 30, 2022 |
January 31, 2021 |
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Common Stock |
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Paid in Capital |
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Retained Earnings |
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Accumulated Other Comprehensive Income |
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Treasury Stock |
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Total stockholders’ (deficit) equity |
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From the CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY |
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II. |
Roll forward the Retained Earnings balance |
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Fiscal 2021 |
Fiscal 2020 |
Fiscal 2019 |
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Beginning Balance |
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Cumulative effect of accounting changes |
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Net Earnings |
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Cash Dividends |
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Other |
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Ending Balance |
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Roll forward the Treasury Stock balance |
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Fiscal 2021 |
Fiscal 2020 |
Fiscal 2019 |
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Beginning Balance |
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Repurchase of Common Stock |
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Ending Balance |
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III. |
Calculate basic Earnings per Share using a simple average (beg + end oustanding shares / 2), refer to page 13-27 of your textbook |
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(1) Calculate EPS from info in the financial statements Item 8., not elsewhere in the annual report and (2) do not use EPS disclosed in the Statement of Earnings, calculate as noted above |
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Formula |
Amounts |
Answer |
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E.g. A – B = C |
100 – 70 |
$ 30 |
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IV. |
Calculate the Price/Earnings Ratio, use market price as of Febraury 23, 2022 (day after press release) – refer to page 13-28 of your textbook |
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Formula |
Amounts |
Answer |
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E.g. A – B = C |
100 – 70 |
$ 30 |
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V. |
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What was the cash dividend per share declared in fiscal 2021? Found in Note 6. STOCKHOLDER'S EQUITY |
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What is the EPS calculated in III. above? |
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Does Home Depot seem to be pay a signifcant amount of earnings as dividends? |
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VI. |
Cash Flow Analysis (Refer to CONSOLIDATED STATEMENTS OF CASH FLOWS) |
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How much cash did Home Depot generate from Operations? |
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16,571 |
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How much proceeds from long-term debt issuances did Home Depot receive in 2021? |
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2,979 |
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Total |
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$ 19,550 |
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How much cash did Home Depot use to benefit owners? |
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From – Repurchases of Common Stock |
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14,809 |
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From – Cash Dividends |
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6,985 |
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$ 21,794 |
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Refer to Note 4. DEBT AND DERIVATIVE INSTRUMENTS. What is the average interest rate on the September 2021 Senior Notes debt offerings? |
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Read the following two articles about stock buybacks? |
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https://hbr.org/2020/01/why-stock-buybacks-are-dangerous-for-the-economy |
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https://hbr.org/2017/09/the-case-for-stock-buybacks |
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Do you agree with Home Depot's strategy regarding stock buybacks? Why or why not? |
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VII. |
Refer to Note 8. STOCK-BASED COMPENSATION, under Stock Options, section that says "The following table presents a summary of stock option activity by number of shares…" |
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What is the Weighted Average Exercise Price per share of outstanding stock options at the end of the year? |
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$ 150.30 |
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What is the price of the Home Depot common stock share at the close of February 23, 2022? |
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see aboe |
$ 300.88 |
