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