Financial Statements Essay Example | Topics and Well Written Essays - 1500 words

Financial Statements - Essay Example This project aims at studying and analyzing the annual report of Home Depot as submitted to the United States SEC in the year 2008. The basic financial statements including the income statement, the balance sheet and the cash flow statements of the company are studied and mapped against the managerial decision making processes of the company in the specific year under study. The consolidated statement of earnings of Home Depot indicates that the company has been extremely proficient in generating revenues in 2008. The total revenue in 2008 was USD 77349 million. The operating expenses of the company were USD 18755 million. This indicates that the company was much efficient in generating high revenues while being able to maintain much lower operating expenses. The net earnings of Home Depot in 2008 were USD 4395 which is favorable when mapped against the industry requirements. In overall, as per the consolidated statement of earnings of Home Depot, the company was performing at a standard level in the year 2008 (Home Depot Inc., 2008, p. 4). The consolidated statement of earnings or the income statement of a company summarizes the revenues that a company has earned during the period of reporting through the sale of its products and services. Also, it includes the expenses that a company has made to produce the revenues during the same period. These expenses may include the selling expenses, overheads, general expenses and depreciation of the assets. The comparison of the revenues and the expenses of a company show the net operating profit of a company. After the deduction of various statutory deductions like taxes and interest expenses, the consolidated statement of earnings of a business represents the net earnings of the company over a specific period of time. The key business decisions like how the return on investment for the company can be improved are