12 Months Ended in Millions $ Percentages Jan. 29, 2017 Home Depot, Inc. Common Size Statement of Earnings Jan. 28, 2018 Jan. 29, 2017 Jan. 31, 2016 Jan. 28, 2018 Jan. 31, 2016 88,519 Net sales Cost of sales Gross profit Operating expenses Sel S 100,904 66,548 S 94,595 62,282 100.00% 100.00% 100.00% 58.254 34.16% 34.19% ling, general and administrative Depreciation and amortization Total operating expenses Operating income Interest and other (income) expense Interest and investment income nterest expense Interest and other, net Earnings before provision for income taxes Provision for income taxes Net earnings 17,864 1,811 19,675 14,681 17,132 1,754 18,886 13,427 16,801 1.690 18.491 11,774 17.70% 1.79% 19.50% 14.55% 18.11% 1.85% 19.97% 14.19% 18.98% 1.91% 20.89% 13.30% 74 1,057 983 13,698 5,068 8,630 36 972 936 12,491 4,534 7.957 166 919 753 11,021 4.012 7.009 -0.04% 1.03% 99% 13.20% 4.79% 8.41% -0.19% 1.04% 85% 12.45% 4.53% 7.92% -0.07% 13.58% 5.02% 8.55% 12 Months Ended in Millions $ Percentages Feb. 02, 2018Feb. 03, 2017 Lowe's Companies, Inc. Common Size Statement of Earnings Feb. 02, 2018 Feb. 03, 2017 Jan. 29, 2016 Jan. 29, 2016 S 68,619 45,210 23,409 S 65,017 42,553 22,464 Net sales Cost of sales Gross margin Expenses Selling, general and administrative Depreciation and amortization Operating income Interest - net Loss on extinguishment of debt Pre-tax earnings Income tax provision Net earnings S59,074 38,504 20,570 100.00% 100.00% 100.00% 65.1 8% 34.82% 34.11%, 34.55% 15,129 1,489 5,846 645 14,105 1,494 4,971 552 15,376 1,447 6,586 633 464 5,489 2,042 S 3,447 22.41% 2.11% 9.60% 0.92% 23.27% 2.29% 8.99% 0.99% 23.88% 2.53% 8.41% 0.93% 5,201 2,108 S 3,093 4,419 1,873 S 2,546 8.00% 2.98% 5.02% 8.00% 3.24% 476% 7.48% 3.1 7% 4.31% Lowe's Companies, Inc. Common-Size Balance Sheets Dollar amounts in Millions Feb. 02, 2018 Feb. 03, 2017 Percentages Feb. 02, 2018 Feb. 03, 2017 Current assets Cash and cash equivalents Short-term investments Merchandise inventory-net Other current assets Total current assets S 558 0.29% 32.28% 1.62% 0.29% 30.39% 11,393 10,458 884 12,000 12,772 Property, less accumulated depreciation Long-term investments Deferred income taxes net Goodwil Other assets Total assets 19,949 366 55.88% 57.98% 1.06% 0.65% 408 0.48% 3.70% 2.59% 100.00% 789 34,408 2.29% 100.00% Current liabilities: Short-term borrowings Current maturities of long-term debt Accounts payable Accrued compensation and employee benefits Deferred revenue Other current liabilities Total current liabilities 3.22% 0.83% 18.67% 2.12% 3.90% 1.48% 2.31% 19.33% 2.30% 3.64% 294 6,651 790 1,253 1,975 11,974 747 1,378 15,564 Long-term debt, excluding current maturities Deferred revenue-extended protection plans Other liabilities Total liabilities 44. 1 0% 2.28% 41.83% 2.22% 27,974 83.36% 81.30% Shareholders' equity: Common stock-$.50 par value; Shares issued and outstanding 830 at February 2, 2018 and 866 at February 3,2017, respectively Capital in excess of par value Retained earni Accumulated other comprehensive income/(loss Total shareholders' equity Total liabilities and shareholders' equity 433 1.26% 0.00% 0.06% 15.37% -0.70% 18.70% 6,434 S 34,408 16.64% S 35,291 Home Depot Inc. Common-Size Balance Sheets Dollar amounts in Millions Jan. 28, 2018 Percentages Jan. 29. 2017 Jan. 28, 2018 Jan. 29, 2017 Current assets: Cash and cash equivalents Receivables, net Merchandise inventories Other current assets Total curent assets S 2,538 12,549 17,724 8.07% 4.38% 28.63% 5.91% 4.72% 29.21% 12,748 638 Net property and equipment Goodwill Other assets Total assets 22,075 2,275 49.57% 2,093 1,235 42,966 51.00% 4.87% 2.87% 100.00% 2.80% 100.00% 44,529 Current Liabilities: Short-term debt Accounts payable Accrued salaries and related expenses Sales taxes payable Deferred revenue Income taxes payable Current installments of long-term debt Other accrued expenses Total curent liabilities 1,559 3.50% 18.27% 3.68% 7,244 520 54 7,000 508 25 18.29% 3.45% 3.88% 0.06% 1.26% 4,05% 2.70% 4.87% 0.00% 54.50% 0.99% 4.88% 96.73% 24,267 Long-term debt, excluding current installments Deferred income taxes Other long-term liabilities Total liabilities 22,349 296 1,855 38,633 52.02% 0.69% 440 43,075 89 89.92% Common stock, par value S0.05; authorized: 10,000 shares; issued: 1,780 shares at January 28 2018 and 1,776 shares at January 29, 2017 Paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost, 622 shares at January 28, 2018 and 573 shares at January 29, 2017 Total stockholders' equit Total liabilities and stockholders' equity 0.20% 22.89% 89.68% 1.27% 108.24% 0.20% 22.78% 82.67% 2.02% 93.55% 10.08% 9,787 35,519 867 39,935 48,196 S 44,529 4,333 S 42,966 Home Depot Inc. Lowe's Companies, Inc. Please note the ratio computations in the comment box. This is the same information that was included in the part 2 instructions. Please let me know if you have questions. Total Assets 2016 41,973 Total Assets 2016 S31,266 Total Stockholders' equity 2016 $6,316 Total Stockholder's equity 2016 $7,654 Jan. 28, 2018 Feb. 02, 2018 Feb. 03, 2017 1. Current ratio Current ratio 2. Liabilities-to equity 3. Times interest earned 4. Return on Equity-shown as a percentage 5. Profit Margin-Shown as a 1.06 5.01 10.40 8.92 .35 Liabilities-to-equity 3, Times interest earned 4. Return on Equity -shown as a 29.63 298.25% 149.44% 56.02% 43.91% 5. Profit Margin-Shown as a percentage 6. Asset Turnover 7, Financial Leverage 8. Redo your Return on Equity calculation by calculating Profit Margin'Asset Tumover Financial 2.23 7.98 2.31 6. Asset Turnover 7, Financial Leverage 8. Redo your Return on Equity calculation by calculating Profit Margin'Asset Tumover Financial 1.97 1.98 298.25% 56.02% 43.91% 4. On the Ratio and Comments worksheet answer the following questions in the text box I have provided the specifc results you have determined throughout part 2. I am not looking for generic comments you have found on a webste. ur answer. You grade is based on you applying financial analysis to a. Compare the two vertical analyses and look for major differences over time and between the companies. Which company is more profitable? Why? Which statement are you using to make your assessment on profitability? b. Is the profit margin similar for the two companies? Compare the percentage of profit margin over the past 2 years. c. Explain how the Return on Equity has changed over time? Include a discussion of changes in profit margin, asset turnover, and financial leverage. Do the changes make sense given the economic and competitive factors that affect the industry and the companies? d. Explain what liquidity means. Which company is more liquid? Why