I just spoke live with Mark about the case write-up.? Hope the following 
works for everyone.?  

I will take a shot at comparing the following for questions (a) and (b): 

(1) Home Depot's strategy (low margin, high turnover, high service, best 
quality products) with their financial ratios. 
(2) Home Depot's strategy with Hechinger's (upscale stores with high profit 
margins) by comparing their financial ratios. 

(Understand that I have not had the benefit of attending the last two 
classes, but hope to watch them on video tape before I send out my answers.) 

Mark has already addressed question (c), we just need to make clear in the 
memo the assumptions he used.? Mark - perhaps you could write those up so we 
can drop them into the memo?

The other big issue is with Home Depot's expansion strategy - should they 
continue to build the 9 new stores, and if so, how should they finance the 
expansion?? They could use their line of credit or go to the equity market.? 
Obviously with the line of credit we need to make sure that they can cover 
the interest expense and with the equity market we need to be careful of 
their depressed stock price.? Can someone else volunteer to look at the 
expansion efforts and financing (question d)?

I am going to work on this today and hope to e-mail it out by 9am tomorrow.? 
Can we set a time on Wednesday to discuss this live?? 

- Carolyn

Carolyn M. Vavrek
Manager - Human Capital Advisory Services 
Deloitte & Touche 
50 Fremont Street 
San Francisco, CA? 94105 

phone: 415-783-5137 
fax: 415-783-8760 
e-mail: cvavrek@deloitte.com 

-----Original Message----- 
From: Mark Guinney [mailto:Mark_Guinney@watsonwyatt.com] 
Sent: Monday, February 05, 2001 5:36 PM 
To: Vavrek; Carolyn (US - San Francisco); chin@haas.berkeley.edu; 
sama@haas.berkeley.edu; Jeff.Dasovich@enron.com 
Subject: Home Depot Spreadsheet (revised) 

Jeff was kind enough to show me where to get the additional balance sheet 
items 
I needed to finish the financial ratio time sheet analysis (I missed the
selected financial statement table).? Please see the revised spreadsheet that 
has both the financial ratios and the pro forma cash flow statement for the 
next 
fiscal year. 

? 

**********************************************
Mark D. Guinney, CFA 
Consultant 
Watson Wyatt Investment Consulting 
345 California Street, Ste. 1400 
San Francisco, CA? 94104 
(415) 733-4487 ph. 
(415) 733-4190 fax 

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