Companies: Home Depot INC. and Lowes INC. Following links for financial statemen

Question

Companies: Home Depot INC. and Lowes INC.

Following links for financial statement

Home depot: http://quotes.wsj.com/HD/financials/annual/income-statement

Lowes: http://quotes.wsj.com/LOW/financials/annual/income-statement

What is the relationship between your companies and their respective employees and investors? How do these relationships affect financial performance?

Are there any issues outstanding for your companies? How do these issues affect the overall financial viability of your companies?

Compare and contrast your two companies using the financial statements for the two firms and the accumulated data.

Justify if you were going to make an investment in one of the two companies, which one would you select? Why?

Prepare a comprehensive final report that summarizes your research and analysis of the two companies you selected for your Final Project over all weeks of this course.

Explanation / Answer

a) Relatioships between these companies is: Both are related to housing development and appliance stores. These two companies are competitors and have no.1(HD) and no.2(Lowe's) market shares. Both are fortune 500 companies and traded on NYSE.

Revenue/ Employee is same for both the companies, but income per employee is more in HD compared to Lowe's. Share holders in HD is less than in Lowe's. It states that Lowe's has more liability on its books and company pays dividend regularly and a bit more shareholder friendly than HD.

b) For Lowe's cash and short term investments growth is negative in 2017, followed by less current, quick and cash ratio which makes company tight on liquidity front. It is good to see that CE/Assets been decreased on both the companies. Capital spending decreased for Lowe's whcih is another major concern in this industry. Lack of capital spending decreases to fund for new projects whcih impacts growth in topline which increases the risk of declining organic growth for the company.

c) Both companies are growing in their sales, EBITDA, net income which is led to increase in growth in assets followed by debt, shareholder equity.

In contrasting terms, Income per employee, EBITDA, total debt, capital expenditure and operating cash flow and PE is more in HD. Net income growth is more in Lowes compared to HD.

d) I would like to invest in HD than in Lowe's because - this company has more grwoth in terms of their capital expenditures and EPS growth. though it has more P/E ratio, for the scale of HD's operations i think this P/E is justifyable.

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