from the following data of balance sheet and income statement of lows, calculate and compare 8 ratios of year one and two and complete Cash Flow Statement Ratios and answer questions, also compare with industry average

Cash Flow Statement Ratios

	Year 2	Year 1
CFO / Revenue =
CFO / Operating Income =
CFO / Total Assets =
CFO / Total Equity =
CFO / Total Debt =

1. In general terms, what do these ratios & ratios like these tell you?

2. In general, would you like these ratios to be higher or lower? Why?

3. Compute these ratios for Years 1 & 2 in the columns above:

4. Trend Analysis: In general terms, did the ratios generally get better or worse?

5. Industry Analysis: Why would it be valuable to evaluate how a firms CFO ratios (such as the ones above) compare with the industry averages for the ratios?

6. What are some risks or concerns if these ratios are TOO LOW?

7. What are some actions that could INCREASE these ratios?

8. What are some risks or concerns if these ratios are TOO HIGH?

9. What are some actions that could DECREASE these ratios?

10. Why would these ratios be commonly considered as key ratios at your organization, and in organizations in general?

11. What actions and/or decisions (if any) in your operational area/unit could influence these ratios?

Balance sheet

	Dollar Values
	Year 2	Year 1
Balance Sheet Accounts	11/3/2023	10/28/2022
Asset Accounts
Current Assests
Cash and cash equivalents	1,210,000,000	3,192,000,000
Short-term investments	321,000,000	464,000,000
Merchandise inventory net	17,530,000,000	19,817,000,000
Other current assets	907,000,000	1,518,000,000
Total current assests	19,968,000,000	24,991,000,000
Property, less accumulated depreciation	17,527,000,000	17,275,000,000
Operating lease right-of-use assets	3,647,000,000	3,512,000,000
Long-term investments	238,000,000	63,000,000
Deferred income taxes net	280,000,000	301,000,000
Other assets	859,000,000	831,000,000
Total assests	42,519,000,000	46,973,000,000
Liabilities, Debt, and Equity Accounts
Current Liabilities
Short-term borrowings	0	0
Current maturities of long-term debt	544,000,000	609,000,000
Current operating lease liabilities	533,000,000	651,000,000
Accounts payable	9,914,000,000	12,249,000,000
Accrued compensation and employee benefits	750,000,000	1,405,000,000
Deferred revenue	1,499,000,000	1,736,000,000
Income taxes payable	121,000,000	913,000,000
Other current liabilities	3,135,000,000	3,313,000,000
Total current liabilities	16,496,000,000	20,876,000,000
Long-term debt, excluding current maturities	35,374,000,000	32,904,000,000
Noncurrent operating lease liabilities	3,602,000,000	4,048,000,000
Deferred revenue Lowe\'s protection plans	1,228,000,000	1,184,000,000
Other liabilities	966,000,000	829,000,000
Total Liabilities	57,666,000,000	59,841,000,000

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Income statement

	Dollar Values
	Year 2	Year 1
Income Statement Line Items	11/3/2023	10/28/2022
Current Earnings
Net sales	20,471,000,000	23,479,000,000
Cost of sales	13,580,000,000	15,661,000,000
Gross Margin	6,891,000,000	7,818,000,000
Expenses:
Selling, general and administrative	3,761,000,000	6,443,000,000
Depreciation and amortization	434,000,000	451,000,000
Operating Income	2,696,000,000	924,000,000
Interest net	-345,000,000	-295,000,000
Pre-tax earnings	2,351,000,000	629,000,000
Income tax provision	578000000	475,000,000
Net earnings	1,773,000,000	154,000,000