An Analysis of Home Depot and Lowes
An Analysis of Home Depot and Lowe’s
Learning Team A:
FIN324 – Financial Analysis for Managers Table of Contents
I. Introduction
II. Company Selection – Overview of Home Depot and Lowe’s
A. Company’s Product or Service
B. When the Companies Started
C. Financial Statements and Auditing Companies
D. Company Industry and Ranking
E. Stock Ticker Symbol
III. Ratio Analysis and Statement of Cash Flow
A. How The Companies Generate Their Cash Flow
B. Significant Internal Events That Affected The Company’s Cash Position (Based on Cash Flow)
C. Revenues and Net Incomes Over the Last Three Years
D. Companies’ Solvency, Liquidity, And Profitability Based On Current Ratio, Return On Sales, Earnings Per Share (EPS), Debt Ratio, And Price Earnings Ratio, Compared With Industry Standards
IV. Analysis of Stocks for both Home Depot and Lowe’s
A. Price History
B. Types of Stock Dividends
C. Index
D. Outstanding Shares and Splits
E. E-Business
V. Conclusion
VI. Recommendations
VII. Tables and Charts
VIII. References I. Introduction During the five weeks of the course, Financial Analysis for Managers 1, Team A undertook the project of assessing two companies in the specialty retail industry, namely Home Depot and Lowe’s. Both companies compete for the same target market – do-it-yourself home improvers and private building and home improvement contractors. Both companies offer a diverse array of products. Both companies are listed on the New York Stock Exchange (NYSE), and have prepared and submitted reports to the Securities & Exchange Commission (SEC). This analysis will discuss the history of the two companies, explore their differences and similarities (both operational and financial), and assess the risk of owning stock in both companies, as well as derive some predictions about the future of both companies based on the analysis.
II. Company Selection – Overview of Home Depot and Lowe’s
A. Company’s Product or Service Both Lowe’s and Home Depot offer a wide variety of
Learning Team A:
FIN324 – Financial Analysis for Managers Table of Contents
I. Introduction
II. Company Selection – Overview of Home Depot and Lowe’s
A. Company’s Product or Service
B. When the Companies Started
C. Financial Statements and Auditing Companies
D. Company Industry and Ranking
E. Stock Ticker Symbol
III. Ratio Analysis and Statement of Cash Flow
A. How The Companies Generate Their Cash Flow
B. Significant Internal Events That Affected The Company’s Cash Position (Based on Cash Flow)
C. Revenues and Net Incomes Over the Last Three Years
D. Companies’ Solvency, Liquidity, And Profitability Based On Current Ratio, Return On Sales, Earnings Per Share (EPS), Debt Ratio, And Price Earnings Ratio, Compared With Industry Standards
IV. Analysis of Stocks for both Home Depot and Lowe’s
A. Price History
B. Types of Stock Dividends
C. Index
D. Outstanding Shares and Splits
E. E-Business
V. Conclusion
VI. Recommendations
VII. Tables and Charts
VIII. References I. Introduction During the five weeks of the course, Financial Analysis for Managers 1, Team A undertook the project of assessing two companies in the specialty retail industry, namely Home Depot and Lowe’s. Both companies compete for the same target market – do-it-yourself home improvers and private building and home improvement contractors. Both companies offer a diverse array of products. Both companies are listed on the New York Stock Exchange (NYSE), and have prepared and submitted reports to the Securities & Exchange Commission (SEC). This analysis will discuss the history of the two companies, explore their differences and similarities (both operational and financial), and assess the risk of owning stock in both companies, as well as derive some predictions about the future of both companies based on the analysis.
II. Company Selection – Overview of Home Depot and Lowe’s
A. Company’s Product or Service Both Lowe’s and Home Depot offer a wide variety of
References: E. Stock Ticker Symbol Home Depot’s common stock has been publicly traded on the New York Stock Exchange under the symbol HD since 1981 (Home Depot, 2003) Gross Profit % Sales 30.2% 29.9% 29.7% Home Depot’s revenue for the fiscal years of 2001, 2000 and 1999 were respectively $53.6, $45.7 and $38.4 billion dollars Home Depot Lowe’s Debt Ratio (2002) 6.47% 1.95%