EXERCISES FOR CHAPTER 11
With Solutions
Home Depot
At the time that of its 10-Q filing of financial statements for the first half of its January
2002 fiscal year, Home Depot’s shares traded at $50 per share.
The following are
summaries from those financial statements.
Balance Sheet, July 29, 2001
(in millions of dollars)
Financial liabilities
1,320
Operating assets
23, 457
Operating liabilities
6,709
Financial assets
1,221
Common equity
(on 2,336 million outstanding shares)
16,649
24,678
24,678
Statement of Earnings, Six Months Ended, July 29, 2001
(in millions of dollars)
Net sales
26,776
Cost of Merchandise Sold
18,795
Gross Profit
7,981
Operating Expenses:
Selling and Store Operating
4,963
Pre-Opening
59
General and Administrative
436
Total Operating Expenses
5,458
Operating Income
2,523
Interest Income (Expense):
Interest and Investment Income
22
Interest Expense
(11)
Interest, Net
11
Earnings Before Income Taxes
2,534
Income Taxes
978
Net Earnings
1,556
This
preview
has intentionally blurred sections.
Sign up to view the full version.
According to financial statement footnotes, Home Depot’s statutory tax rate (combined
Federal and State rates) is 39%.
Other comprehensive income (not in net earnings above)
is negligible.
Use a required six-month return for operations of 4% in calculations below.
Calculate the following from these statements:
1.
Financial leverage
2.
Operating liability leverage
3.
After-tax profit margin
[This exercise is continued in web page exercises for Chapter 14]
Home Depot: Solution
1.
Net financial obligations (NFO)
This is the end of the preview. Sign up
to
access the rest of the document.
- Spring '10
- johnathayeri
- Balance Sheet, Income Statement, Generally Accepted Accounting Principles, common equity, NBC
-
Click to edit the document details
