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    Gaining the information needed for calculating key ratios

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    Develop a Financial Analysis for Home Depot, Inc.

    1- Calculate the following financial ratios/numbers as the Starting point of your analysis.
    (Note: there are five categories with a total of 19 ratios/numbers.

    LIQUIDITY (Short-term solvency)
    Current ratio
    Quick/Acid Test Ratio
    Cash Ratio
    Financial Leverage (Long-term solvency)
    TOTAL DEBT RATIO
    LONG-TERM DEBT-TO- EQUITY RATIO
    TIMES INTEREST EARNED
    EBITDA
    ASSET UTILIZATION
    INVENTORY TURNOVER and DAYS' SALES IN INVENTORY
    RECEIVABLES TURNOVER and DAYS' SALES IN RECEIVABLES
    TOTAL ASSET TURNOVER and CAPITAL INTENSITY
    PROFITABILITY
    PROFIT MARGIN
    RETURN ON ASSETS (ROA)
    RETURN ON EQUITY (ROE)

    MARKET VALUE
    PRICE PER SHARE
    EARNINGS PER SHARE
    PRICE-TO-EARNINGS (P/E) RATIO
    DIVIDEND YIELD
    MARKET-TO-BOOK RATIO
    MARKET CAPITALIZATION

    2. How has Home Depot's financial position changed over the most recent five years?
    3. How does Home Depot's current FY financial position compare to Lowe's and Wal-Mart?
    4. Based on all your analyses, what are your conclusions regarding Home Depot's financial position, and would you consider Home Depot to be a good investment (common stock, bond, etc.)?

    Note: 1. For Questions 2, 3 and 4, you should consider Home Depot's overall performance (Historical, sales, earnings, share price, market capitalization, number of stores, employees, etc.), as well as the 12 key ratios/numbers (in boldface type) in Question 1.

    2. Sources for all data/information included in your analyses should be cited as references.

    © BrainMass Inc. brainmass.com April 3, 2020, 8:14 pm ad1c9bdddf
    https://brainmass.com/business/financial-ratios/gaining-the-information-needed-for-calculating-key-ratios-308649

    Attachments

    Solution Preview

    See attached file.

    The key ratios are simple calculations that combine values from a company's three general financial reports: the income statement, the balance sheet, and the statement of cash flows & investment activities. I have attached a description of the key ratios from the GLOBUS simulator at http://www.glo-bus.com/users/FinancialRatios.pdf

    It will be easier to do calculations if you import the financial data into Excel. For example, use ...

    Solution Summary

    The solution provides links and instruction on calculating key financial performance rations. A company's key ratios are in constant motion, just as a firm's Balance Sheet only captures a snapshot in time. The instructions provided by this solution give the student the directions for importing the most recent financial data and then explains each of the calculations required. The calculations are not provided in a spreadsheet because the data would not be relevant for current assignments. Questions 2 through 4 are left to the student to answer based on the results of the calculations created from the solutions instructions.

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