Finance-The table below contains some of the Industry Benchmark Ratios

| January 31, 2017

Question
BSAD 501

Week 6 – Exercise 2

Please be sure to put your name on all assignments.

Required:Answer the following questions based on your examination of the Lowes and Home Depot 10-Ks. You can find the 10-Ks at the SEC’s website.

1. The table below contains some of the Industry Benchmark Ratios for the Home Improvement Industry. Using the ratios that you calculated during weeks 4 and 5 prepare an analysis of how both Lowe’s and Home Depot compare to the Industry Benchmarks listed below.Minimum of three paragraphs. Be sure to explain fully what each benchmark and ratio indicate about the financial health of both companies.

10-K Analysis

Industry Benchmark

Current Ratio

1.56

Quick Ratio

0.22

Gross Margin

34.81%

Net Margin

6.94%

Return on Equity

47.32%

Return on Assets

13.72%

Lowes

Home Depot

Net Income

2698

6345

Sales

56223

83176

COGS

36665

54222

Total Assets

31827

39946

Sharholers Equity

9968

9322

Current Assets

10080

15302

Current Liabilities

9348

11269

Quick Assets

821

3207

Fixed Assets

20034

22720

Account Receivables

230

1484

Inventory

8911

11079

Ratios

Lowes

Home Depot

Net Profit Margin

4.80%

7.63%

Total Assets Turnvoer

1.77

2.08

Return on Assets

8.48%

15.88%

Equity Multiplier

3.19

4.29

Return on Equity

27.07%

68.06%

Fixed Assets turnvoer

2.81

3.66

Account Receivbale T/O

244.45

56.05

Inventory T/O

4.11

4.89

Current Ratio

1.08

1.36

Acid Test Ratio

0.09

0.28

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