Down Below. If you can just do the ratio and I could do the writing. "Just the math part. "
LOWES Total liabilities $30,864,000 $29,418,000 $27,974,000 $23,612,000 Stockholders' Equity Common stock $401,000 $415,000 $433,000 $455,000 Capital in excess of par value $0 $22,000 $0 $0 Retained earnings $3,452,000 $5,425,000 $6,241,000 $7,593,000 Accumulated other comprehensive income (loss) -$209,000 $11,000 -$240,000 -$394,000 Total shareholders' equity $3,644,000 $5,873,000 $6,434,000 $7,654,000 Total liabilities and stockholders’ equity $34,508,000 $35,291,000 $34,408,000 $31,266,000 Additional Information **Property and Equipment, at cost: Land $7,196,000 $7,414,000 $7,329,000 $7,086,000 Buildings & building improvements $18,052,000 $18,521,000 $18,147,000 $17,451,000 Equipment $10,090,000 $10,475,000 $10,978,000 $10,863,000 Construction in progress $525,000 $530,000 $464,000 $513,000 Total cost $35,863,000 $36,940,000 $36,918,000 $35,913,000 Less: accumulated depreciation $17,431,000 $17,219,000 $16,969,000 $16,336,000 As Reported Annual Income Statement Report Date 2018 2017 2016 Scale Thousands Thousands Thousands Net sales $71,309,000 $68,619,000 $65,017,000 Cost of sales $48,401,000 $45,210,000 $42,553,000 Gross margin $22,908,000 $23,409,000 $22,464,000 Selling, general & administrative expense $17,413,000 $15,376,000 $15,129,000 Depreciation & amortization $ 1,477,000 $ 1,447,000 $ 1,489,000 Operating income (loss) $ 4,018,000 $ 6,586,000 $ 5,846,000 Interest income (expense), net $ (624,000) $ (633,000) $ (645,000) Loss on extinguishment of debt $ - $ (464,000) $ - Pre-tax earnings (losses) $ 3,394,000 $ 5,489,000 $ 5,201,000 Income tax provision $ 1,080,000 $ 2,042,000 $ 2,108,000 Net earnings $ 2,314,000 $ 3,447,000 $ 3,093,000 Additional Information Weighted average shares outstanding - basic 811,000 839,000 880,000 Cash dividends per share 1.85 1.58 1.33 Net cash flows from operating activities $ 6,193,000 $ 5,065,000 $ 5,617,000 Home Depot shares in Millions, $ in Millions 2018 2017 2016 Income Statement Net Sales $108,203 $100,904 $94,595 Cost of sales 71,043 66,548 62,282 Gross profit 37,160 34,356 32,313 Operating expenses: Selling, general and administrative 19,513 17,864 17,132 Depreciation and amortization 1,870 1,811 1,754 Impairment loss 247 0 0 Total operating expenses 21,630 19,675 18,886 Operating income 15,530 14,681 13,427 Interest and other (income) expense: Interest and investment income -93 -74 -36 Interest expense 1,051 1,057 972 Other 16 0 0 Interest and other, net 974 983 936 Earnings before provision for income taxes 14,556 13,698 12,491 Provision for income taxes 3,435 5,068 4,534 Net earnings $11,121 $8,630 $7,957 Additional Information Basic weighted average common shares 1,137 1,178 1,229 Cash dividend per share 4.12 3.56 2.76 Operating cash flow for the year 13,038 12,031 9,783 Report Date2018201720162015 $ in Millions Current assets: Cash and cash equivalents$1,778$3,595$2,538$2,216 Receivables, net$1,936$1,952$2,029$1,890 Merchandise inventories$13,925$12,748$12,549$11,809 Other current assets$890$638$608$569 Total current assets$18,529$18,933$17,724$16,484 Net property and equipment$22,375$22,075$21,914$22,191 Goodwill$2,252$2,275$2,093$2,102 Other assets$847$1,246$1,235$1,196 Total assets$44,003$44,529$42,966$41,973 Current Liabilities: Short-term debt$1,339$1,559$710$350 Accounts payable$7,755$7,244$7,000$6,565 Accrued salaries and related expenses$1,506$1,640$1,484$1,515 Sales taxes payable$656$520$508$476 Deferred revenue$1,782$1,805$1,669$1,566 Income taxes payable$11$54$25$34 Current installments of long-term debt$1,056$1,202$542$77 Other accrued expenses$2,611$2,170$2,195$1,941 Total current liabilities$16,716$16,194$14,133$12,524 Long-term debt, excluding current installments$26,807$24,267$22,349$20,789 Deferred income taxes$491$440$296$379 Other long-term liabilities$1,867$2,174$1,855$1,965 Total liabilities$45,881$43,075$38,633$35,657 Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,782 at February 3, 2019 and 1,780 shares at January 28, 2018; outstanding: 1,105 shares at February 3, 2019 and 1,158 shares at January 28, 2018$89$89$88$88 Paid-in capital$10,578$10,192$9,787$9,347 Retained earnings$46,423$39,935$35,519$30,973 Accumulated other comprehensive loss-$772-$566-$867-$898 Treasury stock, at cost, 677 shares at February 3, 2019 and 622 shares at January 28, 2018-$58,196-$48,196-$40,194-$33,194 Total stockholders’ (deficit) equity-$1,878$1,454$4,333$6,316 Total liabilities and stockholders’ equity$44,003$44,529$42,966$41,973 Additional Information * No allowance account is created for receivables, i.e. Net receivables is equal to gross receivables **Property and Equipment, at cost: Land$8,3638352$8,2078,149 Buildings18199$18,073$17,77217,667 Furniture, Fixtures and Equipment124601150611,02010,279 Leasehold Improvements170516371,5191,481 Construction in Progress820538739670 Capital Leases139213081,1691,020 Less Accumulated Depreciation and Amortization205641933918,51217,075 Net Property and Equipment223752207521,91422,191 Project 1 Financial Statement Analysis Group Project # 2 ACCT3303 Spring 2020 *** Warning: The financial ratios presented in the sample projects are different from what required in the current projects. Therefore, you CANNOT directly follow the samples. Some modification is needed. The specific purposes of the projects are: 1. Apply to actual companies the knowledge and analytical techniques learned from our course. 2. Perform vertical and horizontal analysis and various ratios on the financial statements. 3. Compare the calculated results with competitor and across different years. 4. Summarize the analyses and make investment recommendations. You will be analyzing the following firms: a. Home Depot (HD) b. Lowes (LOW). Please check the blackboard for the financial statements. 2 Project The required tasks are detailed below: (1) Prepare vertical common-size income statements and balance sheets for both companies. Note: Use “Total Sales” and “Total Assets” as the denominators for income statement and balance sheet, respectively. Compute for 2018, 2017, and 2016. (2) Prepare horizontal analysis on income statements and balance sheets for both companies. (3) Prepare ratio analyses (for 2018, 2017, and 2016) for both companies. You should include the following ratios in your computations: Profitability ratios o Gross Profit margin o Profit margin o Return on assets o Return on equity Productivity o Accounts Receivable Turnover o Average Collection Period o Inventory Turnover o days inventory outstanding o PPE Turnover o Asset Turnover Solvency o Debt-to-equity o Times interest earned o Return on Financial leverage Liquidity o Current Ratio o Quick Ratio o Working capital (3) Comment on the analytical results of the two companies based on your work in excel. In addition to contrasting the ratios between the companies, you should interpret the numbers and make suggestions as to why the ratio of one company might be higher/lower than the other. Note: General discussions of the ratios are given in our textbook, which will help you structure your comments. 3 (4) Write a conclusive summary on the firms you have studied. Based upon your conclusions, recommend the better performing firm for potential investment. Your conclusions should be based upon, and specifically reference, the analyses prepared in this report. Report Format Requirements: A. Report body requirements: 1. Cover page. List the title of the project, your name, and semester/year. 2. Main body. Use the following sequence for report content: a. Introduction to the two companies and to the purpose of the report b. Analytical section. This should include all your numerical analyses. This is where you will discuss the results of, comments on, and conclusions about, the Common Size, horizontal, and the ratio analyses for both companies. c. Comparisons of companies and all other analysis (observations and/or interpretations). (You may combine b and c if you wish, as long as both are well covered.) d. Conclusions and recommendation for investment. 3. References. List all major reference sources. 4. Appendices. Include tables and graphs of your numerical analyses. For reference convenience, assign a title to each separate item, such as Table 1, Exhibit 1, etc. B. Typesetting requirements: 1. Use size 12 font. Times New Roman is preferred. 2. Double space between lines. 3. Number pages. 4. One inch on all sides. C. Miscellaneous The total report should be approximately 20 pages. Notes Plagiarism will not be tolerated. Evidence of plagiarism will result in a grade of “F” to the course and may be subject to appropriate disciplines. A portion of your grade will be assessed based on the overall report quality, clarity, format, and cohesiveness. 4 A FREE RIDER in the group will not be tolerated. However, to report an alleged free rider, you should send me a formal written complaint. You should carefully manage your group over the semester to ensure that no teammate will take the chance of turning into a free rider. Try to contact/manage your teammates frequently and inform me if any member is not willing to participate the group work so we can address this issue ASAP. A free rider will receive his/her group project grades solely based on what he/she has contributed to the projects. If there is a free-rider in your group or a member drops the class, the rest of the group members are still expected to