Chapter 3, Problem 2SDC

Comparing Financial Information

Refer to the financial statements of The Home Depot in Appendix A and Lowe’s in Appendix B at the end of this book. (Note: Fiscal 2016 for The Home Depot runs from February 1, 2016, to January 29, 2017. Fiscal 2016 for Lowe’s runs from January 30, 2016, to February 3, 2017. See S1-1 for further explanation.)

Required:

1. 1. Did Lowe’s sales revenues increase or decrease in the year ended February 3, 2017, as compared to the previous year? By how much? Calculate this change as a percentage of the previous year’s sales revenues. Is the trend in Lowe’s sales revenues more or less favorable than The Home Depot’s?
2. 2. State the amount of the largest expense on the income statement of Lowe’s for the year ended February 3, 2017, and describe the transaction represented by the expense. Did this expense increase or decrease and by what percentage, as compared to the previous year? Is the trend in Lowe’s largest expense more or less favorable than the trend for The Home Depot’s largest expense?