In its 2008 annual report, Home Depot reported that fiscal 2008 sales decreased to $71.3 billion (from

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In its 2008 annual report, Home Depot reported that fiscal 2008 sales decreased to $71.3 billion (from $77.3 billion the previous fiscal year), while profits decreased to $2.26 billion (from $4.395 billion). Total assets decreased from $44.3 billion to $41.2 billion, while shareholders’ equity during the same time period remained flat at $17.7 billion. The company’s cash balance increased $74 million with cash flows from operating activities (+$5.5 billion), investing activities (–$1.7 billion), and financing activities (– $3.7billion). Discuss possible explanations for these financial results.

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