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Required information Comprehensive Problem 4 The following are the consolidated statement of earnings and the balance...

Required information

Comprehensive Problem 4

The following are the consolidated statement of earnings and the balance sheet of Home Depot, Inc and Subsidiaries.

THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
Fiscal Year Ended(1)
amounts in millions, except per share data January
31,2016
February
1, 2015
February
2, 2014
NET SALES $ 66,192 $ 71,299 $ 77,359
Cost of Sales 43,752 47,292 51,341
GROSS PROFIT 22,440 24,007 26,018
Operating Expenses:
Selling, General and Administrative 15,886 17,828 17,051
Depreciation and Amortization 1,703 1,770 1,692
Total Operating Expenses 17,589 19,598 18,743
OPERATING INCOME 4,851 4,409 7,275
Interest and Other (Income) Expense:
Interest and Investment Income (27 ) (27 ) (87 )
Interest Expense 660 616 686
Other (152 ) 152
Interest and Other, net 785 741 599
EARNINGS BEFORE PROVISION FOR INCOME TAXES 4,066 3,668 6,676
Provision for Income Taxes 1,361 1,259 2,409
NET EARNINGS $ 2,705 $ 2,409 $ 4,267
Weighted Average Common Shares 1,579 1,642 1,728
BASIC EARNINGS PER SHARE $ 1.71 $ 1.65 $ 2.47
Diluted Weighted Average Common Shares 1,591 1,650 1,589
DILUTED EARNINGS PER SHARE $ 1.70 $ 1.46 $ 2.69

(1) Fiscal years ended January 31, 2016, February 1, 2015 and February 2, 2014 include 52 weeks.

THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
amounts in millions, except share and per share data January
31, 2016
February
1, 2015
ASSETS
Current Assets:
Cash and Cash Equivalents $ 1,276 $ 1,238
Receivables, net 980 975
Merchandise Inventories 10,253 10,743
Other Current Assets 1,334 1,198
Total Current Assets 13,843 14,154
Property and Equipment, at cost 37,401 36,565
Less Accumulated Depreciation and Amortization 11,785 10,168
Net Property and Equipment 25,616 26,397
Goodwill 1,177 1,134
Other Assets 227 406
Total Assets $ 40,863 $ 42,091
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Short-Term Debt $ 370 $ 560
Accounts Payable 5,443 4,807
Accrued Salaries and Related Expenses 1,250 1,127
Sales Taxes Payable 343 330
Deferred Revenue 1,152 1,149
Income Taxes Payable 104 286
Current Installments of Long-Term Debt 1,013 1,759
Other Accrued Expenses 1,575 1,643
Total Current Liabilities 11,250 11,661
Long-Term Debt, excluding current installments 8,661 9,650
Other Long-Term Liabilities 2,131 2,196
Deferred Income Taxes 1,152 1,149
Total Liabilities 23,194 24,656
STOCKHOLDERS’ EQUITY
Common Stock, par value $0.05; authorized: 10 billion
shares; issued: 1.754 billion shares at January 31, 2016
and 1.733 billion shares at February 1, 2015;
outstanding: 1.484 billion shares at January 31, 2016
and 1.537 billion shares at February 1, 2015
82 81
Paid-In Capital 6,294 6,031
Retained Earnings 11,529 11,784
Accumulated Other Comprehensive Income 355 87
Treasury Stock, at cost, 270 million shares at
January 31, 2016 and 196 million shares at February 1, 2015
(591 ) (374 )
Total Stockholders’ Equity 17,669 17,435
Total Liabilities and Stockholders’ Equity $ 40,863 $ 42,091

Selected information as on February 2, 2014:

Working capital $ 2,668
Cash balance $ 1,280
Total assets $ 44,404
Stockholders' equity $ 17,684

rev: 04_07_2020_QC_CS-207273, CS-207274

Comprehensive Problem 4 Part 3

a-1. Compute the percentage change relative to the previous year in net sales for the fiscal years ending February 1, 2015, and January 31, 2016.

a-2. Compute the percentage change in net earnings for the fiscal years ending February 1, 2015, and January 31, 2016.

a-3. Compute the gross profit rate for the fiscal years ending February 1, 2015, and January 31, 2016.

a-4. Compute the net income as a percentage of sales for the fiscal years ending February 1, 2015, and January 31, 2016.

a-5. Compute the return on average total assets for the fiscal years ending February 1, 2015, and January 31, 2016.

a-6. Compute the return on average total equity for the fiscal years ending February 1, 2015, and January 31, 2016.

Homework Answers

Answer #1
change in sales % change in sales = change in sales/sales value in 2015
A-1 sales 71299 66192 -5107 -7.16%
2015 2016 change in net earning % change in net earning= change in net earning/net earning value in 2015
A-2 net earning 1259 1361 102 8.10%
2015 2016
A-3 Gross profit rate = gross profit/sales 24007/71299 33.67% 22440/66192 33.90%
2015 2016
A-4 Net income as % of sales = net income/sales 1259/71299 1.77% 1361/66192 2.06%
2015 2016
A-5 return on total average assets = earning/average of total assets 1259/43247.5 2.91% 1361/41477 3.28%
average assets (44404+42091)/2 43247.5 (42091+40863)/2 41477
2015 2016
A-6 return on average total equity = net income/average of total equity 1259/17559.5 7.17% 1361/17552 7.75%
average of total equity (17684+17435)/2 17559.5 (17435+17669)/2 17552
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