Download 11 quarters of data (Balance Sheet, Income Statement, and Cash Flow Statement of Home Depot from Bloomberg (Ticker # “HD US Equity”). The 11 quarters should include the most recent quarter of data.
Compute the Free Cash Flow (CFFA) using the two methods introduced in Chapter 2: (i) CFFA from Operations and (ii) the CFFA from Stakeholders for each quarter, using Bloomberg Data. Please note that one can compute CFFAs for 10 quarters using 11-quarter data.
For your CFFA computations, the values for each of the key components and subcomponents for each of the 10 quarters also need to be computed. For example, for CFFA from Operations, you will need to compute Operating Cash Flow (OCF), Net Capital Spending (NCS), and Changes in Net Working Capital (dNWC) for each of the 10 quarters. Then, for each of those components, the values for the corresponding subcomponents need to be computed as well. For example, for OCF, you will need to compute EBIT, Depreciation, and Taxes for each of the 10 quarters. The same goes for everything else. Similarly, CFFA from method 2 (stakeholders) needs to be computed.
These items need to be computed in a single Excel Worksheet, which should be named “CFFAs”.
Compute the following 5 financial ratios -as in Chapter3- for each of the 10 quarters: Profit Margin (PM), Return on Assets (ROA), Return on Equity (ROE), Debt-Equity Ratio, and Total Asset Turnover Ratio (TATR). The numerator and denominator items need to be computed separately for each ratio. For each financial ratio, use the ratio values only to do bar charts.
These ratios and bar charts need to be on a single Excel Worksheet, which should be named “Ratios.”
Do a brief analysis of the industry to which Home Depot belongs. Touch upon economics, marketing, and other relevant topics about the industry.
Write a brief write-up of the company focusing on management issues.
Total Points: 100
CFFA computation Method 1: Max Points 30
CFFA computation Method 2: Max Points 30
Ratio Computation: Max Points 15
Ratio Graphing: Max Points 15
Q4: Max Points 5
Q5: Max Points 5
One Excel Workbook needs to be submitted, which should have the following sheets:
BAL – containing Balance Sheet for 11 quarters
IS – Containing Income Statement for 11 quarters
CFS – Containing Cash Flow Statement for 11 quarters
CFFA
Ratios
Industry
