HOME DEPOT

Home Depot & Its Data Warehouse

Home Depot

Introduction

The Home Depot is the largest home-improvement retailer in the United States, ahead of rival Lowe's, and the second-largest general retailer in the United States, behind Wal-Mart. The Home Depot is an American retailer of home improvement and construction products and services. (Sobel, 2004) This company was formed in 1979 by Bernie Marcus and Arthur Blank in Atlanta, Georgia. The Home Depot employs more than 331,000 people and operates 2,234 stores throughout the U.S., Mexico, Canada, and China, offering products and services to end consumers as well as to professional builders, tradesmen and repairmen.

Products

The Home Depot stores sell an assortment of building materials, home improvement, and lawn and garden products, which are sold to do-it-yourself customers, do-it-for-me customers and professional customers with a broad product assortment up to 45,000 items. In addition, the Company operates EXPO Design Center stores (EXPO), which offer products and services primarily related to design and renovation projects.

Organization structure

Financial/Stock performance

Home Depot has excellent performance and it should be able to maintain this in the future. It has the highest margins and value in the home improvement industry. It has high ROA and Gross Profit Margins but they are not showing signs of improvement.

Growth in Sales - Home Depot has experienced a rapid growth in sales. Revenues have nearly doubled every year the past five years. .

Growth in Total Assets - Total assets have experience the same rapid growth in sales as the company has purchased significant inventory to accommodate the aggressive expansion effort.

Change in Net Income - Net income was on a consistently increasing pace until the last year. Net income declined due to aggressive expansion.

Growth in Long-Term Debt - Huge increase in long-term debt was caused by opening of new stores and purchase of inventory. This large increase attributed to the decline in net income.

Return on sales has decreased due to rapid expansion and costs associated with that expansion. (Maltz, 2003)

 A full draw of $75 million will likely result in a violation of the current ratio covenant as the unsecured line will likely be used to purchase current assets.

Cash flow is higher as all measures of efficiency and profitability have improved.

Gross margin has improved.

Average collection period and number of days sales in inventory have decreased.

Fixed asset turnover has improved.

Average payable period has increased allowing the company to hold cash longer.

Operating expenses are down.

Competitors

Lowe's Companies Inc

Forest City Enterprises, Inc.

US Home Systems Inc

Key business tasks supported

Home Depot stores sell a range of building materials and home improvement as well as lawn and garden products. As of Jan. 30, 2011, Co. had 2,248 stores, which included 1,976 stores in the U.S., including the Commonwealth of Puerto Rico and the territories of the U.S. Virgin Islands and Guam; 179 stores in Canada; 85 stores in Mexico and eight stores in China. A typical Home Depot store averages approx. 105,000 sq. ft. and stocks approx. 30,000 to 40,000 products, including both national brand name and proprietary ...