Would a major capex for Home Depot store upgrades yield the company a healthy free cash flow return on investment?
Would a major capex for Home Depot store upgrades yield the company a healthy free cash flow return on investment?
In 2020 Home Depot, the largest home improvement retailer globally, targeted a capital expenditure budget equal to 2% of company sales in order to upgrade store aesthetics and operations. This case and the included assignment reviews the concept of free cash flows—and then asks students to project FCF in order to consider whether Home Depot would get enough of a FCF return on its investment should it go forward with the capex intended for store upgrades.