Investment Fundamentals and Portfolio Management Research Paper

Investment Fundamentals and Portfolio Management - Research Paper Example The company has registered gross profit of $24.3 billion in the fiscal 2011 that is an increase of 4.1% over previous year. That has been achieved through better management practices and customer focused policies (The Home Depot, Inc., 2012). A significant increase in operating income at $6.7 billion has been registered compared to $5.8 billion posted in fiscal year 2010 – that means an impressive 14.1% increase in operating income on yearly basis (The Home Depot, Inc., 2012). The remarkable performance has been possible through four major key initiatives: focusing on customer service, increasing productivity and efficiency, innovation and portfolio strategy providing value to the customers (The Home Depot, Inc., 2012). Increasing shareholder value has been one of the major objectives of the Home Depot. Accordingly, the company resorted to buy-back its own shares and garnered 97 million shares from the market amounting to $3.5 billion during the year ended January 2012. In November 2011, the company rewarded its shareholders by declaring a cash dividend of 29 cents per share, a 16% increase over previous quarter proving that the company values its shareholders (The Home Depot, Inc., 2012). As per Federal Reserve Report of June 2012, economic growth has taken a dip. GDP growth rate reduced to 2% annually in the first quarter this year after touching a 3% growth rate in the last quarter of 2011. Employment conditions though improved in the last quarter of 2011 and first quarter of 2012; however, it slowed down during April and May this year. The unemployment rate, a crucial macroeconomic factor, was registered 8.2 percent in the second quarter of 2012. The forecast has it that the economic growth is likely to be at moderate levels in coming quarters. The depressed housing market is one of the major bottlenecks for the economy to grow at a faster