Home Depot

The following financial report provides an analysis of the financial ratios of David Jones with its close competitor in the retail sector, Myer. The financial ratios analyzed include profitability ratios, leverage ratios, efficiency ratios and market ratios for the two companies. The analysis utilizes individual company time-series analysis as well as industry cross-sectional analysis with the aim of determining the competitiveness of David Jones relative to its close competitor Myer.

The purpose of this paper is to advise analyze the financial statements of Dillard’s, Inc. in order to recommend whether or not my client should invest $1 million in the large retail company. I will compare the financial statements of Dillard’s, Inc. its competitor, Kohl’s Corporation. Investing in retail can be risky because a retail company’s performance is very heavily influenced by factors that have nothing to do with the actual company such as the overall performance of the economy or the weather during the holiday shopping season. There is, however, potential for profitability within the retail sector. Based on my analysis, I recommend that the client should not invest in Dillard’s, Inc. for the following reasons. First, Dillard’s has experience a decline in net income in the last three years. Second, liquidity ratios indicate that they could face possible liquidity constraints in the future. Third, long-term debt paying ability ratios indicate that the company could have trouble paying off the principal of its current debt obligations. Fourth, the profitability ratios are well below industry averages, suggesting that there are more profitable companies to invest in within the industry. And finally, Investor analysis ratios provide mixed opinion of the future performance of the company. I conclude that retail can be a profitable industry to invest in if an investor has the risk tolerance and risk capacity to withstand the uncertainty, but neither Dillard’s

This ratio is similar to ROA except that it shows only the return on the resource contributed by the shareholders. Home Depot maintained steady ratio the last two years while Lowe’s has been decreasing over the past three years.

Sherwin-Williams surpassed the $6 billion in sales for the first time in history. Three of their four operating segments grew their sales and operating profits. Sherwin-Williams faced rising raw material costs but still declared a 20 percent increase in quarterly dividends payable to shareholders in 2004. In 2004, annualized yearly raw material costs for the industry increased more than any time in the last decade. This resulted in pressure on their consolidated gross margin. Sherwin-Williams has put forth efforts to offset raw material cost increases through manufacturing efficiencies, higher fixed cost absorption, alternative technologies, tight expense control, and measured price increases.

The divestiture of HD Supply (HDS) was a good decision for Home Depot. When it first began, it only experience moderate success, which caused Home Depot retail stores to suffer. Thus, Home Depot took HDS budget cuts. With the budget cuts, the retail stores were underperforming in their market. Customers were also, not satisfied with the “warehouse” atmosphere.

Also called (in the US) stockholder” (Business Dictionary.com., 2017). In this case study I will evaluate the structure of the company and find a major problem and then present a solution that I think could help the company improve their competitive advantage. Analysis and Evaluation Looking at the financials from Lowe’s from 2012 to 2015 Lowe’s made small changes that helped them improve their revenue. Then something happened somewhere between the end of 2015 and 2016 that spiked revenue $5,943 and improved the ROE by .15 percent (Hoovers., 2017). Lowe’s is the number 2 home improvement store in the United States.

RadioShack’s financial stability has been a much debated topic in the electronic retail store industry. It has only recently realized that its old formula has not translated well into the current market. Part of its plan to become an active competing member in its industry relies on several factors within the company that can be analyzed, modified using a financial analysis. The financial ratios will let them identify their problem areas in comparison to their industry competitors.

Home Depot is the largest home improvement retailer in the world. Its products include building materials, lawn and garden products, and home appliances. This company appears to have a complete strategic and formulated approach in being the prime home improvement retailer globally. Home Depot sets its strategic framework based on a “three-leg stool” concept that results in loyal customers and shareholder value. The “three-leg stool” concept is customer experience (providing unparalleled service at every touchpoint; product authority (delivering quality, value and innovation); capital allocation driven by productivity and efficiency, leading to smarter investments and richer returns); all which results in interconnected retail (leaders in the seamless shopping revolution), (Home Depot.com, 2016).

A financial performance comparison between Baldwin and Ferris during a three-year period can be determined by analyzing the financial data of both companies that include their stock price, dividends, earnings per share as well as their bond ratings. This analysis will focus on why the trends and changes occurred, and ultimately how decisions affected Baldwin’s performance and their impact in the company’s overall

Retailing is rapidly becoming a global industry and many retailers are expanding to foreign markets. However, some retailers successful in their home countries have failed in emerging markets such as Chile. A case

Harnischfeger was a leading producer of construction, mining and electrical equipment. In 1984, the corporation’s net profit was drawn by $1.28 per share due to the severe financial crisis that the company had faced during the last three years. The worldwide recession in the early 1980s caused a significant drop in the demand for the company’s product starting in 1981 and ended in a series of events that shook the financial stability of Harnischfeger (Palepu, 1985).

The main competitors of Harvey Norman Holding LTD is the group of J B HI-FI, who has declared a sales revenue from 2.73Bn to 2.96Bn as an increase of 8.3% (P.2, JB HI-FI annual report 2011), compares to the increase of 9% of Harvey Norman.According to the figure,it seems Harvey Norman is doing better than J B HI-FI, but the business segment for J B HI-FI is much less diversified than Harvey Norman, therefore, J B HI-FI is actually doing better in just viewing the computer and software segment.

Home Depot’s stock posted a beta of 1.01, which means the stock moved almost identically with the market. With this blend of volatile and less volatile stocks, the group was able to take some chances while still anchoring our return to the market to ensure a competitive return.

(4) The same-store revenue growth rate provided in the 10-Q for 2010 is assumed for the shortrun; as the company has proven that it can achieve that. However, as the stores base increases in the long-run, it become harder to sustain this growth rate. Therefore we have assumed a lower long-run rate; more aligned to more mature companies in the industry. Sensitivity Analysis Upon conducting the sensitivity analysis (see Exhibit 1), we determined the key factors driving the valuation:  Discount rate  Tax rate 

This measures the effect of taxes on ROE. From the last past five years, there has been a rise in the tax burden for both IBM and Accenture, accounting to 71.9% in 2007 to 75.5% in 2011 and 47.5% in 2007 to 64.9% in 2011 respectively. However, Accenture is performing below the industry’s average of 68.7% in 2007 to 75.95% in 2011and IBM is more or less closer to the industry average. The increase in the tax burden in both the companies indicates that taxes declined as a percentage of pre-tax profits. This inclined in IBM is because net income margin improved 0.8 points to 14.9% in 2010 versus 2009 and 14.8% improvement in 2011 versus 2010 and due to increase in operating pre-tax income and margin of 1 points in 2010 versus 2009 and 0.3 points in 2011 versus 2010 and also the effective tax rate in 2011 was 24.5% which has been dropped from 24.8% in 2010 and again dropped from 26% in 2009. Also, the inclined tax burden in Accenture is also due to its effective tax rate of 27.3 % in 2011 that has been dropped from 29.3% in 2010.