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Compute the return on equity (ROE), return on assets (ROA), and return on financial leverage (ROFL), for each company in fiscal year 2017. Assume a

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  1. Compute the return on equity (ROE), return on assets (ROA), and return on financial leverage (ROFL), for each company in fiscal year 2017. Assume a tax rate of 35% for these years.
  2. Disaggregate the ROAs computed into profit margin (PM), and asset turnover (AT) components. Which of these factors drives ROA for each company?
  3. Compute the gross profit margin (GPM), and operating expense-to-sales ratios for each company. How do these companies profitability measures compare?
  4. Compute the accounts receivable turnover (ART), inventory turnover (INVT), and property, plant, and equipment turnover (PPET) for each company. How do these companies turnover measures and compare?
  5. Compare and evaluate these competitors performance in 2017.

Please help me answer this questions a) through e) If possible in excel, please. Thank you!

Analysis and Interpretation of Return on Investment for Competitors Balance sheets and income statements for The Home Depot, Inc., and Lowe's Companies, Inc., fol- low. Refer to these financial statements to answer the requirements. HOME DEPOT, INC. LOWE'S COMPANIES Balance Sheets Balance Sheets 2017 2016 2017 2016 $ 3,595 $ 2,538 $ $ 588 102 558 100 2.029 12,549 11,393 689 10,458 884 608 1,952 12,748 638 18,933 22,075 2,275 17.724 21,914 2,093 12,772 19,721 1,307 408 1,083 $35,291 12,000 19.949 1,082 366 1,011 1,246 1,235 $42,966 $44,529 $34,408 (millions) Assets Current assets: Cash and cash equivalents Short-term investments Receivables, net. Merchandise inventories. Other current assets. Total current assets Net property and equipment. Goodwill Long-term investments. Other assets. Total assets Liabilities and shareholders' equity Current liabilities: Short-term debt and current maturities of long-term debt. Accounts payable.... Accrued salaries and related expenses Deferred revenue Income taxes payable. Other current liabilities Total current liabilities. Long-term debt, excluding current maturities. Deferred income taxes Other long-term liabilities Total liabilities Total stockholders' equity Total liabilities and shareholders' equity. $ 1,431 6,590 747 1,378 $ 1,305 6,651 790 1,253 $ 2,761 7,244 1,640 1,805 54 2.690 16,194 24,267 440 2,174 43,075 1,454 $ 1.252 7,000 1,484 1,669 25 2.703 14,133 22,349 296 1,855 38,633 4,333 $42.966 1.950 12,096 15,564 1,975 11.974 14,394 1,758 29,418 5,873 $35,291 1,606 27,974 6,434 $44,529 $34,408 HOME DEPOT, INC. LOWE'S COMPANIES Income Statements Income Statements 2017 2016 2017 2016 $100,904 $94,595 $68,619 $65,017 66,548 62,282 45,210 42,553 34,356 32,313 23,409 22,464 17,864 1.811 17,132 1,754 (5 millions) Net sales.. Cost of sales Gross profit. Operating expenses Selling, general and administrative. Depreciation and amortization Operating income... Interest and other (income) expense: Interest and investment income Interest expense. Loss on extinguishment of debt Earnings before provision for income taxes Provision for income taxes Net earnings... 15,376 1,447 6,586 15,129 1.489 14,681 13,427 5,846 (74) 1,057 0 (36) 972 0 (16) 649 464 (12) 657 13,698 5,068 $ 8,630 12,491 4,534 $ 7,957 5,489 2,042 5,201 2,108 $ 3,447 $ 3,093

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