Western Governors University Accounting C251 Capstone Task 2 Home Depot paper

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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 the 2013 annual report. A1. Company Informati... on 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 More]

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