Analysis of the Hardware Industry

Please visit the SEC web site ( to locate the most recent 10-K and 10-Q filings for Home Depot, Inc. Once at the web site, find the section labeled “Filings & Forms (EDGAR)” and click on “Search for Company Filings” and at the next page click on the link “Company or fund name…” to get to the search box where you enter the company’s name. Type in “Home Depot” in the company name box and click “Find Companies.” You will get a listing of all the company’s recent SEC filings. We are looking for the March 24, 2016 filing of the company’s Form 10-K for the period ended January 31, 2016 and the company’s latest Form 10-Q for the quarterly period ended. Scroll down the far left column until you see the first ”10-Q” link and “10-K” link —click on the HTML link on that row. That will take you to an opening document. Select and download the first listed documents (10-Q and 10-K) in each window. Caution: The documents are lengthy; consider reviewing them on line or down loading them prior to determine whether you need to print them. The 10-K document contains Management’s Discussion and Analysis (MD&A), which represents management’s discussion of the 2015-2016 activities and performance. This document also contains the full set of financial statements. The 10-Q document contains the most recent financial results for the latest quarter ended. (Make sure you have the most recent 10-Q document as there will be several posted).

Please answer the following questions after reading these documents. DO NOT MERELY CUT AND PASTE OUT OF THE FILINGS. Rather, you should summarize your main thoughts as answers to the questions below. You should be able to describe most of your answers with a few sentences and they should fit in the space provided.

Questions 1 should be answered by referring to the 10-K.

• In your own words, provide a brief description of the industry Home Depot participates in and impact of today’s external environment on Home Depot.
• In your own words, provide a brief description of Home Depot’s core business.
• In your own words, provide a brief description about Home Depot’s major customer groups:
• In your own words, provide a brief description and assessment of the company’s competition.
• In your own words, what is the company’s current overall strategy? That is, what goals/objectives do they have and how are they going about accomplishing those objectives (hit the high level issues).
• Based on your readings, consider the following. If you were the CEO of Home Depot, what might you be worried about? Said differently, what business risks does Home Depot have? Try to provide at least five business risks.
• What potential material misstatements to the financial statements may result due to the above identified business risks? That is, if a business risk was actually realized how might they create a financial reporting or accounting issue? Some business risks may not lead to financial statement risks.
• Look at the Balance Sheet and Income Statement. Based on information provided to the previous questions, describe the top 3 accounts that create the most concern for the audit? Explain why.

2. Looking at the 10-Q filed for the latest quarter ended (quarter ended May 2016), identify any events that are reported in that document that may change any of your answers to questions 1-8 above. Describe how the quarterly information may change your analysis of the information in the 10-K?