Store driven forecast. The home depot is a leading specialty retailer of hardware and home improvement products and is the second largest retail store chain in United States. It operates large warehouse style stores. Despite declining sales and difficult economic conditions in 2007 and 2008 the home depot continued to invest in new store. The following table provides summary data for the home depot.
Home Depot
(amounts in millions except number of stores
........................................2007................2008
Number of Store...... 2234------------- 2274
Sales revenue.................$77349.00----- $74288
Inventory.........................$11731---------- $10673
Capital expenditure net... $3558------------$1847
a. Use the preceding data for The Home Depot to evaluate average revenues per store, capital spending per new store, and ending inventory per store in 2008.
b. Assume that The Home Depot will add 100 new stores by the end of the Year + 1. Use the data form 2008 to project year + 1 sales revenue, capital spending, and ending inventory. Assume that each new store will be open for business for an average of one-half year in Year + 1. For simplicity, assume the in Year + 1, Home Depot's sales revenues will grow, but only because it will open new stores.