Question 3 2 pts

Please look at the other attached file, "Financial Analysis Ratios from Chapter #17."Notice on the left side column of the Ratios page, the Ratios are separated by different Categories of Analysis.There are four (4) different Categories that I have underlined in RedColor.The four categories of financial analysis are: Liquidity and Efficiency, Solvency, Profitability and Market Prospects. Notice that the middle column of the Ratios page shows each Formula (or Ratio) and the Right hand column describes what each ratio/formula actually measures. Remember, your clients are interested in the Market Prospects of Home Depot stock as an Investment.

Therefore, which Ratios from the Financial Analysis Ratios from Chapter #17 (attached) can we calculate to determine the Market Prospects of our Home Depot Stock ?

Group of answer choices

A. The Current Ratio & The Debt Ratio.

B. Times Interest Earned & The Equity Ratio.

C. The Price-Earnings Ratio & the Dividend Yield Ratio.

D. None of These.

Flag this Question Question 4 2 pts

The attached 2019 Home Depot Annual Report (representing the 2018 Fiscal Year) has a Fiscal Year End of February 3rd, 2019.Remember in our Chapter on Financial Analysis (Chapter #17), we learned the importance of using Trend Analysis to make comparisons in financial data from year to year.See page #617 in Accounting Textbook.If we were to look at the Annual Report on page #9/83, we see that the previous Fiscal Year (Fiscal Year 2017) had a year end date of January 28th, 2018.Thus, with these fiscal year end dates in mind, let's now consider the Price-Earnings Ratio as of each fiscal year end date of 01/28/18 and 02/03/19.By looking at Financial Ratios sheet (attached above), we see the ratios under Market Prospects in the left hand column.Specifically, we are interested in the Price-Earnings Ratio, which is:

Market Price per Common Share/Earnings per Share.

We consult the historical stock prices and find that on01/28/18, the Market Price Per Common Share of Home Depot stock was $193.97/share.We also see on page #42/83 of the Annual Report that Basic Earnings per Share was $7.33/share on that date.Therefore, what is the Price-Earnings Ratio on 01/28/18 ?Please Round answer to Two Decimal places.

Group of answer choices

A. $26.46/share.

B. $27.32/share.

C. $28.22/share.

D. None of These.

Flag this Question Question 5 2 pts

Now that we have determined the Price-Earnings Ratio at 01/28/18 (from Fiscal Year 2017) we need to calculate the analogous ratio for the fiscal 2018 year end date of 02/03/19 and make an accurate comparison to see how the Home Depot stock's Price-Earnings Ratio performed year over year.Again, we consult historical stock prices and find that Home Depot stock closed at $184.54/share on 02/03/19.According to page #42/83 of the Annual Report, we see Basic Earnings per Share was $9.78/share.Thus, what is the Price-Earnings Ratio on 02/03/19 and what does the Price-Earnings Ratio measure ?Use Financial Ratios Ratios from Chapter #17 (attached).

Group of answer choices

A. $18.76/share. Price Earnings Ratio Measures Cash Return per Common Share.

B. $18.87/share. Price Earnings Ratio measures Market Value Relative to Earnings.

C. $16.85/share. Price Earnings Ratio measures overall profitability of Assets.

D. None of These.

Flag this Question Question 6 2 pts

Our Price-Earnings Ratio Comparison from FY 2017 to FY 2018:

By how much has the Home Depot's Price-Earnings Ratio Decreased from 2017 to 2018 on a Percentage Basis ?Remember:Consult the discussion on Trend Analysis in Chapter #17 of Textbook to see how this comparison is made when using the Price-Earnings Ratio from FY 2017 as our Base Year when making our comparison to FY 2018.

Group of answer choices

A. (26.68%) or a 26.68% Decrease from FY 2017 to FY 2018.

B. (28.68%) or a 28.68% Decrease from FY 2017 to FY 2018.

C. The Price-Earnings Ratio did not Decrease.

D. None of these are True.

Flag this Question Question 7 2 pts

Let's continue looking at the Market Prospects section of our Financial Ratios sheet (an attached file). We have already considered The Price-Earnings Ratio in the two previous questions.Let's now look at the Dividend Yield Ratio as another indicator of the Market Prospects for our Home Depot Stock that our clients are looking to invest in.Notice on Ratio sheet, Dividend Yield is calculated as:

Annual Cash Dividends per Share/Market Price per Share.

Once again, we will use the Market Price per Share of stock on the Fiscal Year End dates of 01/28/18 & 02/03/19, which are $193.97/share and $184.54, respectively.We now consult page #63/83 of our Home Depot Annual Report and find that in FY 2017, they paid $3.56 in Cash Dividends to their Shareholders.Likewise, page #63/83 shows Home Depot in FY 2018 paid $4.12/share in Cash Dividends to their Shareholders.Knowing this information, what Dividend Yield do you calculate for FY 2017 and for FY 2018 ?Also, what does Dividend Yield measure ?

Group of answer choices

A. 1.84% Dividend Yield in FY 2017 & 2.23% in FY 2018.

B. Dividend Yield measures Cash Return per Common Share.

C. 1.44% Dividend Yield in FY 2017 & 2.03% in FY 2018.

D. Dividend Yield measures Market Value relative to Earnings.

E. Choices A & B are Correct.

F. Choices C & D are Correct.

Flag this Question Question 8 2 pts

Please look at the attached file, Financial Ratios from Chapter #17, and consider the analysis category at the top left of the page, "Liquidity and Efficiency."Specifically, we want to examine the Current Ratio for The Home Depot, where this ratio is:

Current Ratio = Current Assets/Current Liabilities.

What does the current ratio measure ?

Group of answer choices

A. The Current Ratio measures the amount of current assets minus current liabilities.

B. The Current Ratio measures Debt versus Equity financing.

C. The Current Ratio measures the short-term debt paying ability of a company.

D. None of These.

Flag this Question Question 9 2 pts

If the Current Ratio = Current Assets/Current Liabilities,

What does a High Current Ratio suggest about the company ?

Group of answer choices

A. A high Current Ratio suggests the company is unable to meet or pay its current liabilities.

B. A high Current Ratio suggests a strong ability for the company to its current obligations.

C. A high Current Ratio suggest a high liquidity of receivables.

D. None of These.

Flag this Question Question 10 2 pts

What is an ideal Current Ratio for a given company like the Home Depot?Why is the Current Ratio under the analysis Category of Liquidity and Efficiency?

Many financial analysts use a guideline of 2:1 for the Current Ratio.A Current Ratio of 2:1 means for every $2 of Current Assets, the company has $1 of Current Liabilities.Thus, a company with a Current Ratio of 2:1 easily has enough current assets to pay off its current liabilities;In other words, the company has sufficient "Liquidity" against what it owes in current liabilities.What if a company has an excessively high Current Ratio ?What does this mean for the company in terms of its Liquidity and Efficiency ?

Group of answer choices

A. An excessively high current ratio means that the company has invested too much in current assets compared to current obligations.

B. An Excessive investment in current assets is NOT an efficient use of funds because current assets (like Cash) normally earn a low return on investment.

C. It suggests a high profitability of assets.

D. Both A & B are Correct.

Flag this Question Question 11 2 pts

Look at the attached 2018 Annual Report for The Home Depot.Please look at the Consolidated Balance Sheets on page #41/83.What is the Current Ratio for FY 2017 at 01/28/18and also for FY 2018 at 02/03/19 ?Please round to two decimal places.

Group of answer choices

A. For FY 2017 = 1.11. FY 2018 = 1.17

B. For FY 2017 = 1.17. FY 2018 = 1.11.

C. For FY 2017 = 2.21. FY 2018 = 2.36.

D. None of These.

Flag this Question Question 12 2 pts

Home Depot is a Merchandiser.Of course, this means they do not manufacture their products themselves.Instead, Home Depot buys finished products (as Inventory) from their Vendors and sells this Inventory for a profit to Home Depot customers in their stores and via their online sales platform.You studied merchandising in Chapter #5 in ACC 111 Course.Thus, we need to consider typical financial analysis related to merchandising that is essential to include for our clients that are looking to buy Home Depot Stock.

An excellent choice for the financial analysis of a Merchandiser is Inventory Turnover.How is the Ratio for Inventory Turnover calculated and How is it defined ?

Group of answer choices

A. Inventory Turnover = Cost of Goods Sold/Average Inventory.

B. Inventory Turnover = Ending Inventory/Cost of Goods Sold x 365

C. Inventory Turnover measures how long a company holds inventory before selling it.

D. Inventory Turnover measures the Liquidity of Inventory.

E. A & C are True.

F. B & D are True.

Flag this Question Question 13 2 pts

Following Question #12 on Inventory Turnover:What is the Inventory Turnover calculated for the Home Depot for their FY 2018, as of their year end on 02/03/19 ?Consult the Consolidated Balance Sheets for FY 2017 and FY 2018 on page #41/83 and the Consolidated Statement of Earnings on page #42/83 of the attached Home Depot Annual Report.Remember: To calculate Inventory turnover, one of the two numbers we need is Cost of Goods Sold.In the Home Depot annual report, Cost of Goods Sold is also known as "Cost of Sales" found on page #42/83 in the Annual Report.Please round answer to two decimal places.

Group of answer choices

A. 5.33 Times.

B. 5.21 Times.

5.41 Times.

D. None of These.

Flag this Question Question 14 2 pts

Finally, let's consider the financial analysis category of Profitability.What is the Profit Margin Ratio for Home Depot in FY 2017 and FY 2018 ?By how much has the company's profit margin ratio increased or decreased from FY 2017 to FY 2018?Please note that Home Depot produces a Consolidated Statement of Net Earnings (Not a Consolidated Statement of Net Income).Thus, Home Depot uses the term "Net Earnings" rather than "Net Income."Please round answer to two decimal places.

Group of answer choices

A. Profit Margin is 10.28% in FY 2017 and 8.55% in FY 2018.

B. Profit Margin is 10.76% in FY 2017 vs. 9.82% in FY 2018.

C. Profit Margin is 8.55% in FY 2017 and 10.28% for FY 2018.

D. Profit Margin Increased by 20.2% from FY 2017 to FY 2018.

E. C & D are True.

F. A & D are True.

Flag this Question Question 15 2 pts

In conclusion, What is Recommendation as a Financial Analyst to Client on the prospect of buying Home Depot Stock as an Investment ?From what you read in the 2018 Home Depot Annual Report and the results of Financial analysis in the previous questions (above):Is Home Depot a solid choice for clients to invest their money in the Stock market?Remember: clients have the goal of buying a stock that provides appreciation of the stock's price over time AND it must also be a stock that reliably pays Cash Dividends to the shareholders.Is Home Depot such a Stock ?

Please type answer below in at least 4 to six sentences.