Home Depot vs Lowes - Final
docx
keyboard_arrow_up
School
Northern Kentucky University *
*We aren’t endorsed by this school
Course
610
Subject
Finance
Date
Feb 20, 2024
Type
docx
Pages
4
Uploaded by CountHummingbird216
Home Depot vs. Lowes
Andrea Rothfuss
Both Home Depot and Lowes fall within the home improvement sector of the retail industry. In 2021, we were in the midst of COVID. At this point in time, the market for home improvement had grown significantly due to people having more money, reduced access to contractors and more time on their hands as a result of lockdown and stimulus payments. According to NerdWallet, “From the 2019 census survey to the 2021 survey, total projects grew 17% and spending grew 20%.” Company Comparison
o
Home Depot
▪
Number of Stores:
●
US
: 2006 ●
Canada: 182 ●
Mexico: 129
●
Total:
2317 ▪
Number of Countries with Home Depot Stores
: 3
▪
Number of Associates: 490,600
o
Lowes
▪
Number of Stores:
●
US: 1737
●
Canada: 234
●
Total: 1971 ▪
Number of Countries with Lowes Store
: 2
▪
Number of Associates: 340,000
Ratio Analysis
Home Depot
Lowes
Current Ratio
1.01
1.02
Debt to Equity Ratio
-21.58
-4.95
Price to Earning Ratio
22.89
19.32
Earnings Per Share Ratio
15.53
12.04
Return on Equity Ratio
4,929.39%
-549.43
Profit Margin
10.87%
8.74%
Things to note as a potential shareholder:
●
Over the course of 2021, the total sales growth for Lowes was 7.4%, compared to Home Depot with a total sales growth of 14.4%. ●
Dividend Yield:
○
Home Depot
: 2.95%
○
Lowes:
2.22%
●
Inventory Turnover:
○
Home Depot: 5.6x
○
Lowes: 4.1x
Based on the finances of both companies we can see that Home Depot has taken on a lot more debt which could deem it a bit risky, but it has a higher profit margin. This in itself leads me to believe that Home Depot as an organization can better service the debt they are taking on. Meanwhile, the price to earnings indicates that Lowes is a better value holding for a potential shareholder, although based on all the overall picture I would say it’s fair to assume that Lowes would be the riskier option. With all that being said - looking at the sales growth from 2021 in addition to the ratio analysis, as a potential shareholder I would look to put my money into Home Depot. Although it is more expensive and it takes on more debt, their overall sales growth along with higher inventory turnover and a higher dividend yield, I would feel more confident investing my money into Home Depot as the safer option.
References
About the author: Elizabeth Renter's work as a senior writer and data analyst at NerdWallet has been cited by The New York Times. (n.d.). 2022 home improvement report. NerdWallet. Retrieved March 26, 2023, from https://www.nerdwallet.com/article/mortgages/2022-home-
improvement#:~:text=Total%20home%20improvement%20spending&text=From%20the
%202019%20census%20survey,during%20the%202021%20survey%20period. Home Depot - 42 year stock price history: HD. Macrotrends. (n.d.). Retrieved March 26, 2023, from https://www.macrotrends.net/stocks/charts/HD/home-depot/stock-price-history
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
The Home Depot. (n.d.). Retrieved March 27, 2023, from https://ir.homedepot.com/~/media/Files/H/HomeDepot-IR/2022/2021_AnnualReport_IR_Site_FI
NAL.pdf Home | Lowe’s corporate. (n.d.). Retrieved March 27, 2023, from https://corporate.lowes.com/sites/lowes-corp/files/2022-04/Lowe-2021-Annual-Report.pdf Lowe's - 38 year stock price history: Low. Macrotrends. (n.d.). Retrieved March 26, 2023, from https://www.macrotrends.net/stocks/charts/LOW/lowes/stock-price-history
Related Documents
Related Questions
Using the income statement below, please compute the correct variance in total revenue (horizontal analysis) in Korean Won
(Billion) and in percentage between the years ending 12/31/2023 and 12/31/2020 and chose the correct answer":
yahoo/finance
Search for news, symbols or companies
a
News
Finance
Sports
More
My Portfolio
News
Markets Research Personal Finance Videos
Follow
Compare
News
Research
Chart
Community
Statistics
Hyundai Motor Company (HYMTF)
60.50 -0.30 (-0.49%)
At close: August 13 at 4:00 PM EDT
Balance Sheet Cash Flow Dividends
Historical Data
All numbers in thousands
יוויון
Sustainability
Breakdown
Currency in KRW
Annual
Quarterly
Download
Collapse All
15
TTM
12/31/2023
12/31/2022
12/31/2021
12/31/2020
165,543,425,000
162,663,579,000
142,151,469,000
117,610,626,000 103,997,601,000
Total Revenue
Operating Revenue
Cost of Revenue
Gross Profit
Operating Expense
165,543,425,000 162,663,579,000 142,151,469,000 117,610,626,000 103,997,601,000
131.353,259,000 129.179.183.000…
arrow_forward
Make an illustration or assumption for the answer of the question
arrow_forward
Jill Barksalot owns Jill's Jams, a condiment conglomerate focused on world dominance. She sells a variety of jellies and jams that are just to die for mwhahaha. Using the provided data on her last several years of sales, prepare a statement of trend percentages using 2017 as the base year.
(in millions)
2017
2018
2019
2020
Sales
13,241
14,122
11,957
13,244
Cost of goods sold
8,987
9,534
8,272
9,101
Gross margin
4,254
4,588
3,685
4,143
2017
2018
2019
2020
Sales
Cost of Goods Sold
Gross Margin
arrow_forward
Shamal Plastics Industries Sohar, is one of the leading plastic sheets manufacturing companies in Sultanate of Oman. While preparing the financial
statement for the year 2020, some of the earnings reported in the year 2021 has been shifted to 2020. This denotes that Shamal Plastics Industries
management might have followed
O a. The political cost hypothesis
Ob. The debt covenant hypothesis or political cost hypothesis.
Oc The bonus plan hypothesis or political cost hypothesis.
Od The bonus plan hypothesis or debt covenant hypothesis.
arrow_forward
3
arrow_forward
In 2007, the median cost of a new home was $235,500 (source. https//www census gov/const/uspric
emon.pdf). If the CPI in 2007 was 100, and the CPI in 2017 was 137.27, what would the cost of a
new home in 2007 be in 2017 dollars?
Do not include a dollar sign in your answer. Round your answer to two (2) decimal places if
necessary
arrow_forward
Evaluate the following statements using relevant diagrams and provide detailed explanations. The statements describe events that might shift aggregate demand (AD), aggregate supply (AS), both or neither. Clearly label your diagrams.
A) A recent economic report suggests that consumer confidence has increased.
B) Apple Inc. has announced a 50% discount on its new generation iPad devices for university students.
C) After a prolonged acceleration in economic activity, the government raises the rate
of personal income tax.
arrow_forward
The Clothes Clutch, a retail clothier, has had average sales of $400,000 for the last five years, 2018-2022. The firm's total assets at the end of 2020 were $400,000. An internal staff cost analyst has prepared the following financial data from the annual reports. You have been hired as a consultant to help analyze the financial position.
2022
2021
2020
2019
2018
Current Ratio
2.80
2.43
2.36
2.10
2.00
Acid Test Ratio
2.03
1.93
1.82
1.61
1.47
Days' Sales in Receivables
61
58
54
42
35
Merchandise Inventory Turnover
4.20
4.10
4.10
3.90
3.70
Debt Ratio
0.48
0.50
0.49
0.47
0.47
Times Interest Earned
4.60
4.80
5.90
5.70
6.00
Sales as a Percent of 1996 Sales
1.46
1.23
1.12
1.06
1.00
Net Income as a Percent of 1998 Income
1.31
1.20
1.10
1.06
1.00
Gross Profit Margin
38.5%
38.8%
38.9%
40.0%
39.7%
Operating Expenses to Net Sales
11.4%
11.3%
11.5%
11.4%
11.7%
Net Profit Margin
7.6%
8.6%
8.9%
9.4%
9.3%
Return on Total Assets…
arrow_forward
The Simpson Corporation has gathered information regarding past sales of custom t-shirts.
Year
Sales
2013
$225,000
2014
$193,000
2015
$248,000
2016
$360,000
2017
$340,000
2018
$295,000
2019
$310,000
Answer the following questions.
Predict the sales for 2020 using the moving average method.
You noticed a sudden jump in sales for 2016. After inquiring about this jump, you were notified by your manager about a one-time special order sale for $60,000 in that year that is not likely to be repeated. What revision, if any, would you make in the sales information used for projection?
If you revised your historical sales to be used to project 2020 sales, please recalculate your projection using the moving average method.
Which projection (Question 1 or Question 3) do you feel is more representative of the Simpson Corporation's historical sales? Why?
arrow_forward
Ethical Situation: What Would You Do? Discussion Question As one of the newer district sales managers for a fast-growing technology company, you've asked your salespeople to give you three sales forecasts in their territories for the coming year: (a) optimistic, (b) pessimistic, and (c) most likely. After totaling their three different sales forecasts, you realize that the optimistic forecast will increase sales by nearly 20% in your district, the pessimistic forecast by 10%, and the most likely by about 15%. Your national sales manager has asked each district sales manager to give her their most likely sales forecast for the coming year, so she can assign sales quotas. Your thoughts are that it's probably best to give her the most pessimistic sales forecast because this should help ensure that she assigns your district a quota that you should easily achieve. If you can exceed your assigned district sales quota by a substantial amount, you'll probably get a large bonus, and you may…
arrow_forward
In 2017 the Pacifica Hotel obtained an occupancy percentage of 78% and an ADR of $159.00. In 2018, management lowered the nightly rates to attract more business to the property and achieved an occupancy percentage of 81% and an ADR of $154.00.
Describe the effect of using this strategy using the key ratios.
Should management lower the rates again in 2019?
Why?
arrow_forward
Based on the following data below:
In 2019: Total Sales= 1.5 billion with the Motor Category representing 18% of total sales
Projected 2029: Total Sales= 3.75 billion with the Motor Catgory representing 24% of total sales
What is the ratio of the revenue of sale in the Motors Category in 2019 to the projected revenue of sales in Motors in 2029?
The answer is 3:10, however I am not sure how that is concluded. Thanks!
arrow_forward
In 2025, King’s Drug Company experienced a significant increase in the rate of gross profit on sales, compared with the rate it has averaged in recent years. You are asked to determine the most likely reason for this improvement. Support your answer.
The following data are from the records of the company:
2025 sales (at an average price of $50 a unit) were $2,300,000.
2025 purchases (at an average cost of $30 a unit) were $1,200,000.
The company uses the LIFO inventory method and has used it since 1996.
arrow_forward
Please use data table to calculate Gliss’s operating income for 2019,
arrow_forward
Answer in step by step with explanation.
Don't use Ai.
arrow_forward
Help
arrow_forward
Help determine the selling price to retailers in 2020. And answer the more info section after finding the selling price please.
arrow_forward
First, Determine the selling price to retailers in 2020:
arrow_forward
please answer in text
arrow_forward
step by step explanation please.
arrow_forward
I need help urgently could you please explain the solution of this question???
Provincial Imports, Inc., has assembled last year's financial statements (income statement and balance sheet
and financial projections for use in preparing financial plans for the coming year.
Information related to financial projections for next year is as follows:
(1) Projected sales are
$6,006,000.
(2) Cost of goods sold last year includes
$998,000
in fixed costs.
(3) Operating expense last year includes
$246,000
in fixed costs.
(4) Interest expense will remain unchanged.
(5) The firm will pay cash dividends amounting to
35%
of net profits after taxes.
(6) Cash and inventories will double.
(7) Marketable securities, notes payable, long-term debt, and common stock will remain unchanged.
(8) Accounts receivable, accounts payable, and other current liabilities will change in direct response to the change in sales.
(9) A new computer system costing
$364,000
will be purchased during…
arrow_forward
SEE MORE QUESTIONS
Recommended textbooks for you
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage

Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning

Essentials of Business Analytics (MindTap Course ...
Statistics
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Cengage Learning
Related Questions
- Using the income statement below, please compute the correct variance in total revenue (horizontal analysis) in Korean Won (Billion) and in percentage between the years ending 12/31/2023 and 12/31/2020 and chose the correct answer": yahoo/finance Search for news, symbols or companies a News Finance Sports More My Portfolio News Markets Research Personal Finance Videos Follow Compare News Research Chart Community Statistics Hyundai Motor Company (HYMTF) 60.50 -0.30 (-0.49%) At close: August 13 at 4:00 PM EDT Balance Sheet Cash Flow Dividends Historical Data All numbers in thousands יוויון Sustainability Breakdown Currency in KRW Annual Quarterly Download Collapse All 15 TTM 12/31/2023 12/31/2022 12/31/2021 12/31/2020 165,543,425,000 162,663,579,000 142,151,469,000 117,610,626,000 103,997,601,000 Total Revenue Operating Revenue Cost of Revenue Gross Profit Operating Expense 165,543,425,000 162,663,579,000 142,151,469,000 117,610,626,000 103,997,601,000 131.353,259,000 129.179.183.000…arrow_forwardMake an illustration or assumption for the answer of the questionarrow_forwardJill Barksalot owns Jill's Jams, a condiment conglomerate focused on world dominance. She sells a variety of jellies and jams that are just to die for mwhahaha. Using the provided data on her last several years of sales, prepare a statement of trend percentages using 2017 as the base year. (in millions) 2017 2018 2019 2020 Sales 13,241 14,122 11,957 13,244 Cost of goods sold 8,987 9,534 8,272 9,101 Gross margin 4,254 4,588 3,685 4,143 2017 2018 2019 2020 Sales Cost of Goods Sold Gross Marginarrow_forward
- Shamal Plastics Industries Sohar, is one of the leading plastic sheets manufacturing companies in Sultanate of Oman. While preparing the financial statement for the year 2020, some of the earnings reported in the year 2021 has been shifted to 2020. This denotes that Shamal Plastics Industries management might have followed O a. The political cost hypothesis Ob. The debt covenant hypothesis or political cost hypothesis. Oc The bonus plan hypothesis or political cost hypothesis. Od The bonus plan hypothesis or debt covenant hypothesis.arrow_forward3arrow_forwardIn 2007, the median cost of a new home was $235,500 (source. https//www census gov/const/uspric emon.pdf). If the CPI in 2007 was 100, and the CPI in 2017 was 137.27, what would the cost of a new home in 2007 be in 2017 dollars? Do not include a dollar sign in your answer. Round your answer to two (2) decimal places if necessaryarrow_forward
- Evaluate the following statements using relevant diagrams and provide detailed explanations. The statements describe events that might shift aggregate demand (AD), aggregate supply (AS), both or neither. Clearly label your diagrams. A) A recent economic report suggests that consumer confidence has increased. B) Apple Inc. has announced a 50% discount on its new generation iPad devices for university students. C) After a prolonged acceleration in economic activity, the government raises the rate of personal income tax.arrow_forwardThe Clothes Clutch, a retail clothier, has had average sales of $400,000 for the last five years, 2018-2022. The firm's total assets at the end of 2020 were $400,000. An internal staff cost analyst has prepared the following financial data from the annual reports. You have been hired as a consultant to help analyze the financial position. 2022 2021 2020 2019 2018 Current Ratio 2.80 2.43 2.36 2.10 2.00 Acid Test Ratio 2.03 1.93 1.82 1.61 1.47 Days' Sales in Receivables 61 58 54 42 35 Merchandise Inventory Turnover 4.20 4.10 4.10 3.90 3.70 Debt Ratio 0.48 0.50 0.49 0.47 0.47 Times Interest Earned 4.60 4.80 5.90 5.70 6.00 Sales as a Percent of 1996 Sales 1.46 1.23 1.12 1.06 1.00 Net Income as a Percent of 1998 Income 1.31 1.20 1.10 1.06 1.00 Gross Profit Margin 38.5% 38.8% 38.9% 40.0% 39.7% Operating Expenses to Net Sales 11.4% 11.3% 11.5% 11.4% 11.7% Net Profit Margin 7.6% 8.6% 8.9% 9.4% 9.3% Return on Total Assets…arrow_forwardThe Simpson Corporation has gathered information regarding past sales of custom t-shirts. Year Sales 2013 $225,000 2014 $193,000 2015 $248,000 2016 $360,000 2017 $340,000 2018 $295,000 2019 $310,000 Answer the following questions. Predict the sales for 2020 using the moving average method. You noticed a sudden jump in sales for 2016. After inquiring about this jump, you were notified by your manager about a one-time special order sale for $60,000 in that year that is not likely to be repeated. What revision, if any, would you make in the sales information used for projection? If you revised your historical sales to be used to project 2020 sales, please recalculate your projection using the moving average method. Which projection (Question 1 or Question 3) do you feel is more representative of the Simpson Corporation's historical sales? Why?arrow_forward
- Ethical Situation: What Would You Do? Discussion Question As one of the newer district sales managers for a fast-growing technology company, you've asked your salespeople to give you three sales forecasts in their territories for the coming year: (a) optimistic, (b) pessimistic, and (c) most likely. After totaling their three different sales forecasts, you realize that the optimistic forecast will increase sales by nearly 20% in your district, the pessimistic forecast by 10%, and the most likely by about 15%. Your national sales manager has asked each district sales manager to give her their most likely sales forecast for the coming year, so she can assign sales quotas. Your thoughts are that it's probably best to give her the most pessimistic sales forecast because this should help ensure that she assigns your district a quota that you should easily achieve. If you can exceed your assigned district sales quota by a substantial amount, you'll probably get a large bonus, and you may…arrow_forwardIn 2017 the Pacifica Hotel obtained an occupancy percentage of 78% and an ADR of $159.00. In 2018, management lowered the nightly rates to attract more business to the property and achieved an occupancy percentage of 81% and an ADR of $154.00. Describe the effect of using this strategy using the key ratios. Should management lower the rates again in 2019? Why?arrow_forwardBased on the following data below: In 2019: Total Sales= 1.5 billion with the Motor Category representing 18% of total sales Projected 2029: Total Sales= 3.75 billion with the Motor Catgory representing 24% of total sales What is the ratio of the revenue of sale in the Motors Category in 2019 to the projected revenue of sales in Motors in 2029? The answer is 3:10, however I am not sure how that is concluded. Thanks!arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:CengageFinancial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage LearningEssentials of Business Analytics (MindTap Course ...StatisticsISBN:9781305627734Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. AndersonPublisher:Cengage Learning
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage

Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning

Essentials of Business Analytics (MindTap Course ...
Statistics
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Cengage Learning