Management Strategic Audit

CURRENT SITUATION - HOME DEPOT , INC

Current Performance

Presently , Home Depot Inc . is portraying a favorable financial performance when compared to past years . Indeed , net sales for fiscal 2005 increased by 11 .5 , while gross profit increased by 11 .8 operating income by 18 .1 and net earnings by 16 .7 . The corporation is ranked among one of the best companies in retailing and from 2000 to 2005 it opened more than 900 new stores . Such market ranking is further sustained by the fact that sales revenue from 2000 to 2005 nearly

doubled to 81 .5 billion . However , the net sales of the company decreased significantly to 66 .2 billion in 2009 (Home Depot n . d . c A slight increase in the return on invested capital is also noted from 21 .5 to 22 .4 in fiscal 2005 . The aforesaid figures provide a generic view of the company 's financial performance . In to provide a more in-depth analysis it is important that accounting ratios are computed and applied on the organization . These will be computed in terms of profitability , activity and market share . In this respect , the accounting ratios for profitability , activity and market share are computed below

Profitability 2005 2004 Position

Net Profit Margin 7 .2 6 .8 Improvement

Cost of Sales to Sales 66 .5 66 .6 Improvement

Operating Expenses to Sales

22

22 .6

Improvement

Return on Assets 13 .1 12 .8 Improvement

Return on Equity 21 .7 20 .7 Improvement

Earnings per Share 2 .73 2...