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Home Depot Part One

Sean Maxwell

ACC/497

August 12, 2013

Silvana Moffitt

Home Depot Part One

A company has to be able to know if they are profitable or if they are losing money, know how to determine what changes need to be made, how their resources need to be used, and to determine if the business should continue with a product or even continue to do business. Accounting can help a business determine these things through financial statements and non-financial statement information. Financial statements set the path for company’s and help bring in investors and secure needed loans by answering the questions of how strong the company maybe. This paper will look at Home Depot 2008 three basic financial statements the Consolidated Statement of Earnings, Balance sheet, and the statement of Cash Flows.

The first basic financial statement is called the Consolidated Statements of Earnings also known as the Income Statement. The Consolidated Statements of Earnings combines revenue, expenses, and income of the Entire Corporation and not just individual parts (Codjia, 2013). The Income Statements provides information that shows if the company is profitable.

The Income Statement is important because it will tell an investor or lender if the company is profitable or if they are losing money. Profit is not the only thing to be by the Income Statement, but also gain a better understanding of the company as a whole. Income statements allow the company and Investors to calculate ratios to determine what direction the company should go and help make decisions that are needed. Also ratios data will provide investors with information to help determine if they want to make the decision to invest in the company or if they want to stop investing in a company. Based on the Home Depot 2008 Annual report in the past three years the company’s Net income has declined steadily in 2007 the net profit was 26,546 and in 2008 25,997 and at the begin of 2009 the Net income was...