Home Depot, Inc
23 Pages Posted: 21 Oct 2008
Abstract
This aggressive retailer is adding store space at the rate of 25% per year. The case presents an external financing requirement amounting to $1.4 billion over the next five years. Students must decide how to meet this requirement wisely, acknowledging the relationship between business strategy and financial policy. Analysis of the firm's share price reveals a substantial overvaluation in the market.
Excerpt
UVA-F-0960
Version 1.5
THE HOME DEPOT, INC.
The fastest-growing major area of retailing today is that of do-it-yourself/home improvement. The most dynamic company in the business is Home Depot.
—M. Gilliam, securities analyst, First Boston
Trying to wed two conflicting strategies—low-cost structure with broad assortment and a high level of customer service—is arguably one of the most difficult retail concepts to pull off. Home Depot is further along the learning curve than anyone else.
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Keywords: financial policy, growth management, security analysis, strategy formulation, strategy implementation, valuation
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