Financial Statements Paper Part II
We will discuss and review Home Depot Fiscal Year 2008 and as well as their financial reports available during that time, we will review the various techniques of financial analysis. We will do this by taking a complex glimpse into the processes of the company in order to determine how efficiently the company’s management team was committed to their mission statement and the company’s stakeholders.
Home Depot 2008 fiscal year commenced with strong economic turmoil the assisted in slowing the improvement of the United States economy. After a financial increase in 2007, several mortgages defaulted during the beginning of 2008 began intensify at an increase rate. In the first quarter the global investment banking service company Bear Stearns was unable to obtain financing. Bear Stearns advised the Federal Reserve that its liquidity position had weakened, and that it would likely file for bankruptcy if alternative sources of funds were not made available. Fannie Mae and Freddie Mac, mortgage loans were placed under governmental conservatorship, tis move required that the U.S. Treasury department supply the funds to help stabilize these companies. This would raise the national debt ceiling to $800 billion. During time the economic decline continued to progress, causing the consumer confidence declined. This caused “The Crash of 2008,” which was five week time period. During this time Dow Jones Industrial Average fell over 1,874 points. Cause first all time since April 25, 2003, also the S&P 500 dropped close to 300 points which was its lowest level since April 11, 2003. Home Depot was also hit hard by the economic downturn, which resulted in the company’s retail sales declining by 7.8 percent and its adjusted earnings per share declining by 22 percent in 2008.
In Home Depot’s 2008 Annual Report, the company’s Chairman and Chief Executive Officer,...