Assess Home Depot’s financial move out from 1986 to 1999 and explain the decline in carrying out in 2000: 1) black market to Exhibit 4, Home Depot reached $1 one million million million in gross gross gross sales in 1986, and reached $38 billion in 1999. The medium join on in on the whole footage was 26% from 1986 to 2000 while the sales growing rate dropped a lot in 2000. on that point was also a drop in sales per square footage from $423 in 1999 to $415 in 2000 and a drop in each week sales per store from $876,000 in 1999 to $826,000 in 2000. The average sales growth rate was 31% from 1986 to 1999. However, the growth rate dropped to 19%. The declining performance in 2000 from much smaller growing in sales was caused by Home Depot’s vulturous expansion efforts and market saturation, and magnified by a retardent economy. mingled with June 1999 and May 2000, the Federal Reserve had raised engross place six times to slow the economy.
2) The average hard hard roe was 25.2% from 1986 to 1999, but dropped to 20.9% in 2000. Given the similar operating ROA (19.6% for 1986 to 1999, and 19.8% for 2000) for the straddle periods, the decreased ROE in 2000 was attributable to a large decrease in financial leverage gain. Despite of a higher spread in 2000 comparing to the period from 1986 to 1999, the make a motion financial leverage was pretty low, which is caused by the large increase in the stockholder’s equity.If you want to get a full essay, order it on our website:
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