Office Depot Questions For Financial Managerial Accounting

  1. Is The Home Depot’s liquidity situation such that current liabilities can be easily paid? Why or why not?
  2. Are the company’s receivables “turning over” at a rate that should be pleasing to management? Why or why not? What actions might management consider taking to speed up collections?
  3. Is the company’s inventory turning over at a satisfactory rate? Why or why not? Does the company maintain an adequate level of inventory to meet customer demand? Might it be the case that the company maintains TOO HIGH a level of inventory? Why or why not?
  4. Based on the composition of the company’s CURRENT assets, what problems is the company likely to encounter if its inventories turn over at a much slower than expected rate?
  5. How has The Home Depot’s profitability changed over recent years? On what measures are you basing your response? If you were one of the company’s corporate managers, would you be satisfied with the trend in gross profit? The trend in operating income? Why or why not?