Beruflich Dokumente
Kultur Dokumente
13
Return on Sales
Days’ Inventory 75 82 83
(365*AVG Inventory/Cost of Sales)
Days’ Receivables 3 8 4
(365*Accounts Receivables/Sales)
Days’ Payable 35 34 33
(365*Accounts Receivables/Purchases)
Cash Flow Analysis
($000) 1983 1984 1985
Net Earnings 10261 14122 8219
Depreciation and Amortization 903 2275 4376
Deferred Income Taxes 713 1508 3612
Goodwill Amortization 93 637
Other 180
Dividends
26
36
Problems with the
company…
• The Company Has a Negative Cash Flow from Operations in Each
of the Three Years.
• The company was not able to finance its cash need in the year
1986.
• From January 2nd 1985 to February 3rd 1986, the Home Depot’s
stock price fell by 23.4%, which suggest that issuing new equity
may not fetch enough cash to the company.