Accounting Capstone: Analysis of Home Depot 2
A. Company Information Template
Complete the template for your chosen company based on the 2013 10-K and
... [Show More] the 2013 annual
report.
A1. Company Information
Identify the company’s basic information, including each of the following:
Company’s name The Home Depot
Company’s date of formation The Home Depot incorporated in Delaware in
1978
Industry in which the company operates Retail Industry, selling building materials and
home improvement products.
Company’s size in terms of annual sales $78,812,000,000
Company’s size in terms of total assets $40,518,000,000
Company’s size in terms of employees (all
full- and part-time)
Approx. 365,000 associates were employed at
the end of 2013
Company’s size in terms of total market value
$106,053,000,000
This value was calculated based on the
outstanding number of shares for the 2013
fiscal year-end of 1.38 billion shares and the
closing stock price of $76.85 on Jan 31,2014,
which is the last closing date before the fiscal
year-end.
Location of company headquarters, including
the states and countries in which it operates
The Home Depot headquarters is in Atlanta,
Georgia. There was a total of 2,263 stores.
1,977 of these stores were in the United
States, including stores in all 50 states, The
District of Columbia, Guam, Puerto Rico and
the Virgin Islands. There were also 180 stores
in Canada and 106 stores in Mexico.
A2. Customers and Suppliers
Identify the company’s top three customers
and suppliers.
The three primary customers for The Home
Depot are:
Professional Customers: These
customers are professional
contractors, remodelers, etc. that
purchase product and complete
projects for customers.
Do-it-Yourself Customers: these are
customers that purchase their own
products and complete their own
Accounting Capstone: Analysis of Home Depot 3
projects.
Do-it-for-Me Customers: These are
customers that purchase their own
supplies, but have someone else
complete their projects.
The Home Depot is an exception in that it
does not have three top suppliers. Their goal
is to offer a variety of products from a variety
of suppliers. It is typical for The Home Depot
to carry 30,000-40,000 different products
throughout the year from these suppliers.
A3. Financing
Identify the company’s sources of financing.
The main sources of financing for The Home
Depot are the following:
1. Proceeds from Long-Term Borrowing,
net of discounts: $5.22 billion
2. Proceeds from the sale of Common
Stock: $241million
3. Commercial Papers: Allow borrowing
up to $2 billion
4. Credit Facilities: Collection of banks
up to $2 billion as back-up to
commercial papers.
5. Capital Lease: Used to finance a
portion of Home Depot’s real estate.
These capital leases have a present
value of 14.724 which is the value of
the Long-Term Debt and Current
Installments on Long-Term Debt from
the consolidated balance sheet.
A4. Related Parties
Identify the company’s related parties,
including people and other companies
No related parties appear on the annual
report.
A5. Company Life Cycle
Identify the current stage in the company’s
life cycle. The Home Depot is currently in the growth
phase of the company’s life cycle. Having
been in business since 1978 and attaining
brand recognition it is out of the introductory
phase. Home Depot is also not in the maturity
phase as it is still growing, remains profitable,
and continues to release and develop new
Accounting Capstone: Analysis of Home Depot 4
products.
A6. Risks
Identify three risks associated with this
business and/or industry.
1. Competition could affect product
price, market share and demand in the
marketplace.
2. Reliance on third-party suppliers i [Show Less]