See attached annual reports containing financial statements for the year 2007 pertaining to:
a. The Balance Sheet
b. The Income Statement
c. The Statement of Cash Flows
Based on the general organization of Home Depot, I need an opinion on which of the above statements is more useful for the company: Net income or Cash from Operating Activities (please explain).
Also, please make a prediction about the company based on the additional information found in the annual report from the attached statements.
Please find my response below.
In my opinion, Cash Flow from Operating Activities is more useful in Home Depot's case. Cash is ultimately the King. Home Depot can have reported income on their income statement when they have in fact not received any cash for it. All companies, eventually need cash to pay their bills and debtholders. Thus, cash from operating activities is a good measure of how much ...
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