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Negative interpretation of home depot cash position

Assignment Help Accounting Basics
Reference no: EM131820276

Problem - Given

The Home Depot, Inc. Consolidated Statements of Cash Flows

*Fiscal Year Ended*

31-Jan-10

1-Feb-09

3-Feb-08

*amounts in millions*


CASH FLOWS FROM OPERATING ACTIVITIES:


Net Earnings

$2,661

$2,260

$4,395

Reconciliation of Net Earnings to Cash Provided by Operating Activites:


Depreciation and Amortization

1,806

1,902

1,906

Impairment Related to Rationalization Charges

-

580

-

Impairment of Investement

163

163

-

Stock-based Compensation Expense

201

176

207

Changes in Assets and Liabilities, net of the effects of acquisitions and disposition:


(Increase) Decrease in Receivables, net

-23

121

116

Decrease (Increase) in Merchandise Inventories

625

743

-491

Decrease (Increase) in Other Current Assets

4

-7

109

Increase (Decrease) in Accounts Payable and Accrued Expenses

59

-646

-465

Decrease in Deferred Revenue

-21

-292

-159

(Decrease) Increase in Income Taxes Payable

-174

262

-

Decrease in Deferred Income Taxes

-227

-282

-348

(Decrease) Increase in Long-Term Liabilities

-19

306

186

Other

70

242

271

Net Cash Provided by Operating Activities

5,125

5,528

5,727




CASH FLOWS FROM INVESTING ACTIVITIES:


Capitial Expenditures, net of $10, $37 and $19 of non-cash capitial expenditures


in fiscal 2009, 2008 and 2007, respectively

-966

-1,847

-3,558

Proceeds from Sale of Business, net

-

-

8,337

Payments for Business Acquired, net

-

-

-13

Proceeds from Sales of Property and Equipment

178

147

318

Purchases of Investments

-

-168

-11,225

Proceeds from Sales and Maturities of Investments

33

139

10,899

Net Cash (Used in) Provided by Investing Activities

-755

-1,729

4,758




CASH FLOWS FROM FINANCING ACTIVITIES:


(Repayments of) Proceeds from short-term borrowing, net

-

-1,732

1,734

Repaymens of Long-term Debt

-1,774

-313

-20

Repurchases of Common Stock

-213

-70

-10,815

Proceeds from Sales of Common Stock

73

84

276

Cash Dividends Paid to Stockholders

-1,525

-1,521

-1,709

Other Financing Activities

-64

-128

-105

Net Cash Used in Financing Activities

-3,503

-3,680

-10,639

Increase (Decreases) in Cash and Cash Equivalents

867

119

-154

Effect of Exchange Rate changes on Cash and Cash equivalents

35

-45

-1

Cash and Cash equivalents at Beginning of Year

519

445

600

Cash and Cash equivalents at End of Year

1,421

519

445




SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS MADE FOR:


Interest, net of interest capitalized

664

622

672

Income Taxes

2,082

1,265

2,524

Required - Cash flows from both investing and financing activities have been mostly negative for all three years presented. Considering Home Depots overall cash flows, including its cash flows from operations, would you say that this leads to a negative interpretation of Home Depot's cash position at January 31, 2010? Why or why not?

Reference no: EM131820276

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