The Home Depot Annual ReportFinancial Statements Paper Part llAcc 497The Home Depot Annual Report 2Home depot is a home improvement retailer, with stores that sell several type of items such as, building materials, home improvement and garden lawn products. The Home Depot store also provides an large amount of services to the many customers, which includes installation servicesfor carpet, flooring, cabinets, countertops, heaters, generator just to name a few. The three primary serving customer groups : Do-It Yourself, Do-It-For-Me and the professionals services, Home Depot as of July 2,2012, the company has 2,248 stores, which includes 1976 stores in the United States, including the commonwealth of Puerto Rico and the territories of the United States , Virgin Islands and Guam: 179 stores in Canada: 5 stores in Mexico and eight in China( Mergent 2012). Home Depot has a goal to " providing the highest level of service, with the variety of selections of products and with the lowest prices: Home Depot can be described asa value driven company, with eight core values that include(Home Depot, 2012): excellent customer service, taking care of our customer, giving back, doing the right thing, enhancing shareholder value, respect for people, entrepreneurial spirit, and building strong relationships.In this paper , I will view certain time of period in the tender of the company (Home Depot Fiscal Year 2008), and will utilize the available financial reports, with various techniques of financial analysis, take an good look into the operation of the company in an effort to show how effective the company's management staff is staying true to their mission statement and to its stakeholders.Vertical AnalysisIn the year of 2008 started with a strong economic which is slowing the progress within the United States economy. There was an increase doing the 2007, with the mortgage defaults during the beginning of 2008 the sales rose even at a rapid pace. March 13,2008, Bear Stearns, aglobal investment banking service, : plagued by an inability to obtain financing, advised theThe Home Depot Annual Report 3Federal Reserve that its liquidity position had demised, they would have to file for bankruptcy uncle different sources of funds were make available:( Money-Zine.com,2012)As a retail suppler of home improvement and biding materials, the store Home Depot washit hard by the economic, which resulted in the company's retail sales to decrease by 7.8 percent and its was adjusted earnings per share by decrease by 22 percent in the year of 2008. In 2008 Annual Report, the company Chairman and Chief Executive Officer, Francis S. Blake , he said this year is not an ordinary year, with a disappointing results: (Home Dot Annual Report, 2008), by announcing that going forward, the company "after having sold to commercial0builder and closed in landscape and floor outlets in the year of 2007, they would now focus only on its retail stores according to Bloomberg, 2008, here its customer service showed a trail that was leading the competitor which is Lowe's company, which is a misstep that was resulted in "Home Depot losing 33 percent of this market value during the year of 2007(Bloomberg,2008) There are other issues that was addressed by Mr. Blake throughout the year and in the management's discussion and analysis of financial condition and results of operations section on the company's 2008 Annual Report which were (Home Depot ,2012): the necessary to close 15 underperforming stores but about 15 stores from the company' new stores opening, to focus on the company's core of retail businesses with $1.8 billion in capital expenditures, modernization and upgrading of the existing stores engage the customers and employees, change the company's supply chain to enhance the product availability, continued to effort on reduction in reducing debt, making a returning of $1.5 billion in dividends to shareholders, which was great new to the investment community, and resulted in the Home Depot in outperforming the Dow Jones and S&P 500 which indices despite the economic downturn of year of 2008.The Home Depot Annual Report 4In viewing the vertical analysis the consolidated income statement, balance sheet, and cash flow statement that follow, the impact of "Crash of 2008" has seen on the Home Depot's gross profit and net earnings for the year. Now through the great cost control and expense management, there as a great increase in cash and cash equivalents during the year of 2008, in results the company reduce its short and long-term debts.Trend AnalysisThe trend horizontal income statement analysis there was a reduction in the net sales andthe profitability of Home Depot during the year of 2008. Taking a close look at the stockholders'Equity section of the balance sheet analysis , there is a success of the company's ongoing debt reduction effort, reducing the level of each, there is a short and long-term debt to a three-year low. The horizontal cash flow trend analysis that are follows , which again displaying the operational reduction in cash, and do not serve as a fact that the company great increased the ratio of its capital expenditures, in results showing a promise to upgrade its equipment and facilities for a better position of the company, its employees, and its customers.Ratio AnalysisFinancial ratios are very useful in that they can be used as a means of measuring a company's performance against the industry and as a means of measuring progress with their own goals. When looking at the ratios , it can be ascertained that the company experienced financial difficulties due to the economic downfall in 2008 which was a bad impacted with its netprofitability, the firm did not manage to operate its business in regards to became effectively. Home Depot's current ratio, it shows the same for 2008 as it was for the year of 2007. A low current ratio is a sign of the company may have experience some difficulty quickly raising some cash in the event that such a need should happen. But, for a large amount of volume, highThe Home Depot Annual Report 5inventory form such as Home Depot, a 1.2 current ratio is quite the norm, particularly in the area of the company's relatively low inventory turnover ratio, which shows as a sign that the companydo not keep its cash tied in a very long and slow moving items. The company's days of low sales are outstanding ratio and the indication that the company has been effectively