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    Evaluate Home Depot Budget

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    Evaluate Home Depot. What types of budgets would you recommend for the company? Why?

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    Home depot is an American retailer of home improvement, building material, garden products and provides number of services through its stores all over the world. The Home Depot was the world's largest retailer of home improvement products particularly in the United States Canada, and Mexico in terms of net sales in the year 2009 (Home Depot, 2010). The Home Depot is world's fifth largest retailer and ranked 25 in Fortune 500 companies list in 2009.

    Evaluation of Home Depot Budget

    Budgeting is an important activity in financial management that plays a key role in the success of an organization. It is an effective financial tool that is used to plan the future activities, forecast the future revenues and expenses, and compare the current and past financial performance of an organization with help of different types of budgets (Nugus, 2008). Budget can be defined as a comprehensive and coordinated plan that is expressed in financial or numerical term for the resources, expenses, and revenue of an organization for a specific future time period (Hammonds, 2006).

    Home Depot uses a budgeting process that includes preparation of different budgets to achieve its long term and short goals and objectives. Different types of budgets are used in the business for planning the future activities that includes sales budget, cash budget, flexible budget, master budget, purchase budget, expenditure budget etc. In the current business environment, Home Depot also uses these budgets for planning, controlling, and decision making within the organization and to measure the performance of its operations (Annual Report, 2009). Under the Security Exchange Act of 1934, the Chief Financial Officer Home Depot is responsible to maintain adequate internal control over the financial reporting and to evaluate the effectiveness of its operations (Home Depot, 2010). Some of the factors are helpful to evaluate the financial condition of Home Depot, which are as below:

    Net Sales

    The net sales of Home Depot were $66.2 billion in 2009 and $71.3 billion in the year 2008. It exhibits that the net sales of Home Depot has decreased by 7.2% in 2009 compare to 2008 because of the some factors such as impact of negative comparable store sales, slowdown in global economy, and weakness of U.S. construction & home improvement market (Annual Report, 2009). The management of Home Depot has estimated that the market share of the company in the U.S. home improvement market is approximately ...

    Solution Summary

    This solution provides an evaluation for the Home Depot budget.