Preview

Home Depot Capital Structure

Best Essays
Open Document
Open Document
1746 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Home Depot Capital Structure
Unit 6 Research Paper
Presented in Partial Fulfillment
Of the Requirements for the Class
GB 550-05NA: Financial Management
25 May 2010

Table of Contents
Abstract...........................................................................................................................................3
History of Home Depot…………………………………………………………………………....4
Business risks related to capital structure…………………………………………………………5
Financial risk related to capital structure………………………………………………………….5
Home Depots Financial Status………….…………………………………………………............6
Future and Flexibility of Home Depot….…………………………………………………………7
Conclusion………………………………………………………………………………………...8
References…………………………………………………………………………………………9
Abstract

When
…show more content…
For a company that we are all so familiar with, it comes at a surprise that the business is only 30 years young. After being fired in 1978 from executive positions, Bernie Marcus and Arthur Blank joined forces to design the concept of, “…a home improvement warehouse with the lowest prices, best selection, and best service” (Blank & Marcus, 1999). Tom Sternberg, founder and former CEO of Staples, reveres Bernie Marcus and Arthur Blank as, “…the two greatest entrepreneurs in American business history,” and felt that they had, “built the single best culture of any business…an extremely people-focused business in regard to both Home Depot’s customers and, even more important, its employees” (Goldstein, 2007). Today, the business has expanded to all fifty states, Canada, Mexico, and China. Yet, headquarters still remains located in the North American southern city of Atlanta, Georgia. The founders have since retired and current CEO, Frank Blake, now runs the business. In 1999 the Home Depot had established 775 stores, acquired 160,000 associates, and made $30 billion in sales (Roush, 1999). In 2008, Home Depot sales totaled $ 71.88 billion and the number of stores representing Home Depot tallied up to 2,193 (homedepot.com,

You May Also Find These Documents Helpful

  • Best Essays

    The home improvement industry is greatly influenced by the housing market and by various economic factors. In 2008 housing turnover was down 16%, S&P/Case-Shiller US National Home Price Index was down 18.2%, Unemployment up from 4.9% in January 2008 to February 2009, and we witnessed some of the lowest consumer confidence levels on record (Lowe’s, 1008 Annual Report P.2).…

    • 4325 Words
    • 18 Pages
    Best Essays
  • Powerful Essays

    Home Depot -vs- Lowes

    • 3739 Words
    • 15 Pages

    An industry of competition, and tight margins The Home Depot, and Lowe 's Company are still at it. Both of these companies stand now as the industry standard for the home improvement sector. The numbers that will be presented in this study show proof that both companies have extremely strong financial positions, and a long future in the home improvement industry. Competition is good for the retailer, but even better for the customer. Each company has its strengths and limitations. The decision on which retailer is the better one must be decided by the individual analyzing of each company. The Home Leader -vs- Improving Home Improvements.…

    • 3739 Words
    • 15 Pages
    Powerful Essays
  • Good Essays

    The Home Depot (Ticker: HD) is the world’s largest home-improvement retailer along with being an American Fortune 50 company. The company operates 2,259 retail building supply/home improvement “warehouse” type stores all across the United States, Canada and Mexico. The Home Depot has over 340,000 team members and is based in Atlanta, Georgia. The average store size is just over 100,000 square feet along with an additional 24,000 square feet set aside for seasonal gardening.…

    • 797 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Home Depot

    • 2275 Words
    • 10 Pages

    Home Depot 's target market is individual homeowners/small contractors. Even though the traditional ideology is that cost leadership and product differentiation business strategies are mutually exclusive, Home Depot was successful at using a combination strategy. First, Home Depot optimized the cost leadership strategy by offering low and competitive prices to its customers by emphasizing higher sales volumes with lower margins, while instituting a high inventory turnover. Home Depot successfully offered a warehouse product strategy to the individual consumer for the first time. Previously, this type of price discounting was only available to professional contractors who earned product price discounts due to large quantities of raw material purchases. Secondly, Home Depot utilized the product differentiation strategy by promoting quality products in its merchandise inventory, as well as, championing excellent customer sales assistance. The company boasted a 90% full time employee utilization, which allowed the company to properly train these employees in technical matters. Customers were able to buy products that were cheap, while under the guidance of knowledgeable Home Depot staff. This allowed Home Depot to employ both the cost leadership and product differentiation strategies. Home Depot will be able to maintain this combination strategy in the long run, since these two strategies do not complete with one another in normal business operations. Training employees will not cause product margins to increase dramatically. Since the company launched this dual business strategy at the onset of its business life cycle, the company has already factored in the cost of training/retaining quality employees in its product margins. Therefore, the company is fully prepared to absorb the cost of this employee quality, while maintaining low product prices to offer to its customers.…

    • 2275 Words
    • 10 Pages
    Powerful Essays
  • Powerful Essays

    Globalization is a factor that is prevalent for companies wanting to succeed in gaining competitive advantage over their competition. Taking advantage of markets overseas can prove to be a process that can serve a company well. The Home Depot is no different. In 1998, the company saw the opportunity and went with it, opening stores in Santiago, Chile, and in San Juan, Puerto Rico. In order to avoid the obvious roadblocks of cultural and language barriers, as well as product…

    • 1673 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    Office Depot is a supplier of office products and services. The company's selection of brand name office supplies includes business machines, computers, computer software and office furniture, while its business services encompass copying, printing, document reproduction, shipping, and computer setup and repair. An S&P 500 company, Office Depot generates revenues of over US $14 billion annually and has 42,000 employees worldwide. It is headquartered in Boca Raton, Florida. Office Depot is one of the biggest office supplies retailers, but its sales revenue decreased dramatically 26% from 14.5 billion dollars in 2008 to 10.7 billion dollars in 2012.…

    • 1306 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    The Ethics of Leadership

    • 1648 Words
    • 7 Pages

    References: Anonymous (2007) Home Unimprovement: was Nardelli’s tenure at home depot a blueprint for failure? Knowledge@Wharton Retrieved from http://knowledge.wharton.upenn.edu/article.cfm?articleid=1636.…

    • 1648 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    Home Depot faces competition in product innovation from Lowe 's and other companies (and sometimes individuals). This can have…

    • 949 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Home Depot Research Paper

    • 874 Words
    • 4 Pages

    The Home Depot has been the under the leadership of Robert Nardelli since 2000. Since Nardelli has been CEO The Home Depot has delivered superior sales and earnings by improving its core retail stores, extending the business and has expanded into new markets. He is changing store formats, creating more direct to consumer sales, offering installation services, and expanding into the global marketplace. Nardelli's has made the main goal of Home Depot to "improve everything that we touch". His goal by 2010 is to create 400 to 500 new stores.…

    • 874 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Home Depot Research Paper

    • 2133 Words
    • 9 Pages

    Decks, patios, bathrooms you name it, there is no job too difficult when Home Depot is there. Home Depot has helped many troubled individuals accomplish impossible tasks that seem like they can never be done. Home Depot has been around since the late 70's and has only gained more popularity as the years have passed. As one of the leading retailers in the United States, Home Depot is highly respected by the business world, customers, and also by thousands of Home Depot employees working around the world. With all of these employees comes enormous responsibility to maintain quality, sales, and productivity as well as employees motivation throughout…

    • 2133 Words
    • 9 Pages
    Good Essays
  • Powerful Essays

    There are 2 years covered in the Consolidated Balance Sheet, namely fiscal years ended 1 February 2004 and 2 February 2003.…

    • 1835 Words
    • 8 Pages
    Powerful Essays
  • Good Essays

    Home Depot vs Lowes

    • 4360 Words
    • 18 Pages

    The Company was founded in 1978 in Atlanta, Georgia and has since become the world's largest home improvement retailer, operating more than 1,500 stores (Home Depot, EXPO, and other subsidiary companies) across North America. Home Depot caters to both do-it-yourselfers and professional customers who serve the home improvement construction and building maintenance market segments. Today, Home Depot’s stores stock up to 35,000 different kinds of building materials and lawn and garden products. Home Depot’s unique services include free in-store clinics for home improvement skills as well as design and decorating consultation, truck and tool rental, home delivery, free potting and many others. The Home Depot currently operates in 50 U.S. states and in the District of Columbia, eight Canadian provinces, and Mexico. In 1998, Home Depot opened stores in Puerto Rico and recently opened two sourcing offices in China.…

    • 4360 Words
    • 18 Pages
    Good Essays
  • Powerful Essays

    Office Depot, Inc. (“Office Depot”), a supplier of a broad assortment of office products and business services throughout the United States and worldwide, announced on February 20, 2013 a merger agreement with OfficeMax, Inc., which will better equip them to compete in the rapidly-changing industry. In fiscal year 2012 alone, Office Depot generated $10.7 billion of revenues from its products and services, yet industry reviews of this company seem unfavorable.…

    • 1753 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    Home Depot

    • 1621 Words
    • 7 Pages

    Today, The Home Depot is the world's largest home improvement specialty retailer, with 2274 retail stores in the United States (including Puerto Rico and the U.S. Virgin Islands), Canada, Mexico and China. The Home Depot"! stock is traded on the New York Stock Exchange (NYSE: HD) and is included in…

    • 1621 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    premise that “cash is king, and debt is bad”. As of late their capital structure has…

    • 1591 Words
    • 7 Pages
    Powerful Essays