Home Depot

Your goal is to estimate the value of Home Depot at the end of 2011. For it's, we must forecast the growth sales, the margin, the annual depreciation and amortization, capital expenditures and the increase of net working capital.

Using the past value, we see that the historical mean of the sales growth is 11.13% over 15 years, but if the look more precisely we note that there are three main periods:

* in the first, between 1995 and 2000, the growth is 24.22%

* in the second, between 2001 and 2006, the growth is 12.15%

* in the tried, between 2007 and 2010, the crisis period is -6.67%

So looking at the historical, we decide that the growth must increase to the mean of the second period in 3 years and then during 5 years staying at this level and after decreasing until the long term growth rate of 3%.

For the margin, we forecast that it will be like the historical mean of the last 10 years: 3.82%. Note in the value line sheet, the margin is the product of the operational margin and the gross margin, then we have made the mean of the gross margin and the mean of the operational margin to compute the margin.

To forecast the depreciation, we have looked in the cash flow (source: yahoo finance). For the last 3 years, the amount of depreciation is decreasing of about 90 mi. per year, then we have just take the same trend for the future, supposing that the number of stores wouldn't