Home Depot Executive Summary

statements are for the fiscal year ended February 3, 2013.) The problem contains three major

Home Depot’s corporate-level strategy is one of internal growth. This conclusion was reached based on the increased focus that Home Depot has placed on growing its existing online and traditional retail operations. Between 2016 and 2018, Home Depot is expected to invest approximately four billion dollars into improvements in its online and physical retail locations in order to make both work more synergistically and grow sales (Petro, 2016). Home Depot hopes that these investments will continue to increase sales at both its physical and digital retail locations, thereby growing the company without adding significant numbers of physical locations.

Retailing building supply stores have become a popular retail industry sector due to increased public awareness and the need of many homeowners for the home improvement products. Back in the 1970s, long before warehouse stores ruled home improvement land, do-it-yourselfers shopped at “home centers.” These 30,000 square foot stores offered cheaper prices and wider selection of products, about 25,000 more than local hardware stores and eliminated the extra trip to the lumberyard. The dependence of many of these retailers upon the homebuilding industry for much of their business has also been reduced and the warehouse superstores, such as Home Depot, have become more important. The smaller companies in the

Home Depot is the fastest growing retailer in the U.S. by some accounts. It has a fascinating history of innovation and entrepreneurship. The company had some difficulties in the mid-2000s that some attribute to cultural clashes. However, during this period the company was able to take full advantage of the housing boom. Yet when the bubble burst, Home Depot was forced to claim substantial losses. Despite these loses Home Depot has weathered the storm fairly well and is in prime position to take advantage of an economic recovery; if it ever comes.

HD Supply serves customers in the Infrastructure & Energy market which includes services in building and maintaining water systems, oil refineries and petrochemical plants, and for the generation, transmission and distribution of electrical power. Home Depot identified HD on their Consolidated Statement of Earning for discontinued operations.

The home improvement sector of the economy is large with two major players in the industry and with many smaller local and regional competitors. These two major competitors are Home Depot and Lowe’s. These two companies account for over $110 billion in total sales each year. Even though sales have gone down over the past few years due to the downturn in the economy they have not gone down nearly as much as home sales and this is due to more people deciding to do more home improvements to their own home then buying a new home. Both of these companies have been able to keep up sales and increase them year over year by improving current

The income statement provided represents the financials for a five year reporting period - 1998 to 2002.

The Home Depot (NYSE: HD) is a home improvement, construction products and services retailer operating over 2,000 big-box stores in the United States and abroad. The Home Depot was founded in 1978 by Bernie Marcus and Arthur Blank with the vision of one-stop shopping for do-it-yourself (DIY) customers, installation services for do-it-for-me (DIFM) customers and competitive products for the professional market. Their DIFM installation programs include products such as carpeting, flooring, cabinets, countertops, and water heaters. In addition, the company provides installation of various professional products like generators and HVAC systems.

From 1976 to 1982 the compound annual growth in net sales was 18.5% and the compound annual growth of after tax profit was 25.9%. Therefore, a 10% net sales growth shown in the proforma financial data seems reasonable.

The first company that will be analyzed is Home Depot. Home Depot's total assets increased to $40,518 million from $40,125, an increase of 0.9%. These figures, however, are lower than the value of total assets on the books for HD for the prior three years. The 2008 fiscal year was the point where Home Depot had the highest asset levels at $44.324 billion. The recession has been the biggest culprit for the decline in the size of Home Depot. All of the firms in the building supplies industry have a strong relationship between their sales and the strength of the housing market, as home purchases are a major impetus for home renovation projects. Home Depot's size declined with the onset of slowness in the housing market, and it is expected that its size will not begin to increase until the housing market recovers. Home Depot management has noted that there are signs of life in the US housing market, and that this should be taken as an encouraging sign for the company (Isidore, 2012). Indeed, the company's balance sheet has grown in size throughout the 2013 fiscal year, so that the latest Q3 total

This paper gives the reader an insight into how a manager in a competitive industry in a two-firm constant sum game makes decisions. The writer will be playing the role of a Home Depot, Inc. manager, and the major competitor is Lowe’s, Inc. Home Depot is the largest United States (U.S.) home-improvement retailer while Lowe’s is the second-largest U.S. home-improvement retailer. This is significant because what one company does affects the other. To compare the two companies their company profiles were reviewed. The latest news headlines on both companies were

Pro-Forma Financial Statements (I/S, B/S and Statement of Cash Flows) with deltas out three years and analysis

b.) The financial statements that are commonly prepared for external reporting purposes are the Balance Sheet, Income Statement, and Statement of Cash Flows. General Mills gives these statements a title of Consolidated Statements of Earnings, Consolidated Balance Sheets and Consolidated statements of Cash Flows. Consolidated means that General Mills is factoring in all of its subsidiaries into its aggregated accounting figures that are represented on these statements.

Profit growth has on average exceeded stated goals from 1997-2003, averaging on 33 %. Transaction value, an indicator of the activity level, has grown notably less than profits (207 % vs. 289 % over six years), indicating profitable growth. This contrasts with the general squeeze on profitability and growth for the industry. International operations have not performed well. Transaction value has grown more than 50 % from 2001-2003, while profits have declined 65 %.

Furthermore, given the challenging market conditions in 2008 and 2009, it would be interesting to analyze how Harvey Norman responded to the economic downturn. The company observed “a significant improvement in net profit from underlying business operations during the last 6 months of FY2009”, according to Harvey Norman’s 2009 Annual Report. It would be insightful to see what strategies and tactics were used by Harvey Norman to achieve this result, especially in the integrated, franchise and property system sectors since these were reported by the company to be “resilient in achieving strong results and growing market share in all key product categories.”