Purchase Solution

Analysis of financial statements: Lowes vs Home Depot

Not what you're looking for?

Ask Custom Question

Analyze the ratios of both companies using the ratios below (see data attached in excel). Refer to the financial statements for this section in order to expand the information base and gain insight into the numbers and the ratios. Explain your conclusion about their financial status using the ratios and consider how the ratios are related.

Home Depot
PROFITABILITY

Return On Assets
Return On Invested Capital
Cash Flow To Sales
Cost of Goods Sold To Sales
Gross Profit Margin
Operating Profit Margin
Pretax Margin
Net Margin

Lowes
PROFITABILITY

Return On Assets
Return On Invested Capital
Cash Flow To Sales
Cost of Goods Sold To Sales
Gross Profit Margin
Operating Profit Margin
Pretax Margin
Net Margin

Home Depot
ASSET UTILIZATION

Assets Per Employee
Assets Turnover
Inventory Turnover
Capital Expend Pct Total Assets
Capital Expend Pct Sales

Lowes
ASSET UTILIZATION

Assets Per Employee
Assets Turnover
Inventory Turnover
Capital Expend Pct Total Assets
Capital Expend Pct Sales

Home Depot
LEVERAGE

Total Debt Pct Common Equity
LT Debt Pct Common Equity
LT Debt Pct Total Capital
Equity Pct Total Capital
Total Debt Pct Total Assets
Common Equity Pct Total Assets
Total Capital Pct Total Assets
Dividend Payout
Cash Dividend Coverage Ratio
Working Cap Pct Total Capital

Lowes
LEVERAGE

Total Debt Pct Common Equity
LT Debt Pct Common Equity
LT Debt Pct Total Capital
Equity Pct Total Capital
Total Debt Pct Total Assets
Common Equity Pct Total Assets
Total Capital Pct Total Assets
Dividend Payout
Cash Dividend Coverage Ratio
Working Cap Pct Total Capital

Home Depot
LIQUIDITY

Quick Ratio
Current Ratio
Cash Ratio
Receivables Pct Current Assets
Accounts Receivable Days
Inventories Days Held

Lowes
LIQUIDITY

Quick Ratio
Current Ratio
Cash Ratio
Receivables Pct Current Assets
Accounts Receivable Days
Inventories Days Held

Purchase this Solution

Solution Summary

This is a classic assignment: analyze two competitors in the same industry. The ratios are examined and discussed in four sections in everyday language the novice can grasp. The ratios were downloaded from BIZSTAT and so the actual computation (numerator and denominator) are not in the solution. This is coaching on interpreting (not computing) ratios.

Solution Preview

I put text boxes on each of the four ratio tabs. I computed a few additional ratios and attached the actual financial ...

Solution provided by:
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution


Free BrainMass Quizzes
Lean your Process

This quiz will help you understand the basic concepts of Lean.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.