I need help with the A-K part
a. c. 1. Compute the following ratios for the most recent year and include them in an Appendix to this report. [The calculations for each of these ratios can be found in your textbook. The numbers you use for these ratios should agree with the numbers in financial statements. Show all of your supporting work). Return on Equity (Return on Owners' Investment) b. Return on Assets (Return on Total Investment) Earnings per Share d. Net Profit Margin Current Ratio f. Quick Ratio Accounts Receivable Turnover h. Inventory Turnover Times interest earned j. Debt to Equity ratio k. Price/Earnings (P/E) ratio (Use the market price as of the balance sheet date). e. g. i. 2. Identify a company that you believe is the closest competitor ("competitor") to your company. Compute the ratios in (1) above for the competitor and include them in the Appendix Based on your computations in (1) and (2) above, address the following: Profitability: 1. What is your assessment of the profitability of your firm in the most recent year? How does your firm's profitability compare with that of the competitor? 2. Compare the cash flows from operating activities for your firm with the net income for the most recent year. What factors have contributed to the difference between these two numbers? Liquidity and Capital Structure: 1. Will the company be able to meet its obligations as they become due? How does your firm's liquidity compare with that of the competitor? 2. What is the capital structure of your company (1.e., what percentage of the total assets of the company are financed through liabilities and what percentage through stockholders' equity)? 3. Is the capital structure of the competitor significantly different from that of your company? Briefly explain your answer. International Financial Reporting Standards (IFRS) 1. What is the purpose of IFRS? 2. What is the IASB? 3. What are some of the overall differences between US GAAP and IFRS? 4. If your company adopted IFRS: (a) Would its reporting for inventory differ? Briefly explain. (b) Identify other areas that would be impacted if your company adopted IFRS. Lowe's Companies, Inc. Consolidated Statements of Earnings (In millions, except per share and percentage data) January 31, 2020 February 2, 2018 Amount % Sales Amount % Sales 100.00% Fiscal Years Ended February 1, 2019 Amount 71,309 48,401 22,908 % Sales 100.00% S S 100.00% S. 72,148 49,205 22,943 68.20 67.88 68.619 46,185 22,434 67.31 31.80 32.12 32.69 24.41 21.04 Current Earnings 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 21.30 1.75 8.75 2.07 15,367 1,262 6,314 691 2.05 17,413 1,477 4,018 624 5.64 9.60 0.96 0.88 0.92 14.444 1.404 6,586 633 464 5,489 2.042 3,447 0.68 8.00 5.623 4.76 7.79 1.86 5.93% 3.394 1.080 1.52 1.342 4.281 2.98 S S 2,314 3.24% S 5.02% S 5.49 S 2.84 S 4.09 Basic earnings per common share Diluted earnings per common share Cash dividends per share $ S 2.84 S 4.09 5.49 2.13 S $ 1.85 S 1.58 Lowe's Companies, Inc. Consolidated Statements of Comprehensive Income (In millions, except percentage data) January 31, 2020 Fiscal Years Ended February 1, 2019 Amount February 2, 2018 Amount % Sales % Sales Amount % Sales S 4,281 5.93 % $ 2,314 S 3.24 % (0.30) 3,447 251 5.02% 0.37 94 0.13 (221) (0.03 1 Net earnings Foreign currency translation adjustments - net of tax Other Other comprehensive income/(loss) Comprehensive income See accomnaming notes to consolidated financial statements (21) 73 0.10 (220) 0.37 (0.30) 2.94 % 251 3,698 4.354 6.03 % S 2,094 $ 5.39% 716 $ 511 218 Assets Current assets: Cash and cash equivalents Short-term investments Merchandise inventory - net Other current assets Total current assets Property, less accumulated depreciation Operating lease right-of-use assets Long-term investments Deferred income taxes - net Goodwill 160 13,179 1,263 15,318 18,669 3,891 372 216 12,561 938 14.228 18,432 256 294 303 303 Other assets 702 995 Total assets 39,471 34.508 1.941 722 1,110 8.279 Liabilities and shareholders' equity Current liabilities: Short-term borrowings Current maturities of long-term debt Current operating lease liabilities Accounts payable Accrued compensation and employee benefits Deferred revenue Other current liabilities Total current liabilities Long-term debt, excluding current maturities Noncurrent operating lease liabilities Deferred revenue - extended protection plans Other liabilities Total liabilities 597 501 7.659 684 1.219 2.581 662 1.299 15,182 16,768 3.943 2.425 14,497 14.391 894 827 712 37,499 1.149 30.864 Commitments and contingencies Shareholders' equity: Preferred stock - $5 par valve, none issued Common stock - $0.50 par value; Shares issued and outstanding January 31, 2020 February 1, 2019 Capital in excess of par value Retained earnings Accumulated other comprehensive loss Total shareholders' equity Total liabilities and shareholders' equity 763 801 381 401 1.727 (136) 1,972 39,471 3,452 (209) 3,644 34,508 S Lowe's Companies, Inc. Consolidated Statements of Shareholders' Equity (In millions, except per share data) Common Stock Capital in Excess of Par Value Total Shareholders' Equity Shares Amount Accumulated Other Comprehensive Income/(Loss) (240) 866 S 433 S Retained Earnings 6.241 3,447 S s S 6,434 251 3,447 251 (1,324) 99 (1.324 99 (215) 401 (20) (2.939) 4 138 830 s 415 S 22 s s 11 S 5,425 33 2,314 (220) (1,500 Balance February 3, 2017 Net earnings Other comprehensive income Cash dividends declared, $1.58 per share Share-based payment expense Repurchase of common stock Issuance of common stock under share-based payment plans Balance February 2, 2018 Cumulative effect of accounting change Net earnings Other comprehensive loss Cash dividends declared, $1.85 per share Share-based payment expense Repurchase of common stock Issuance of common stock under share-based payment plans Balance February 1, 2019 Cumulative effect of accounting change Net earnings Other comprehensive income Cash dividends declared, $2.13 per share Share-based payment expense Repurchase of common stock Issuance of common stock under share-based payment plans Balance January 31, 2020 See accompanying notes to consolidated financial statements. FI (32) (16) (209 (2.820) 113 (3.174 140 5,873 33 2.314 (220) (1,500) 74 3,045) 115 3,644 (263) 4,281 73 (1.653) 98 (4,325) 117 1,972 801 S 401 S S S (209) S 3,452 (263) 4.281 73 (1,653) 98 (41) (21) (214) (4,090) 116 763 S 381 S S 1,727 S (136) $ 4.281 S 2.314 $ 3.447 1.410 1.60 1,540 468 (151) Cash flows from operating activities: Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization Noncash lease expense Deferred income taxes Loss on property and other assets - net Impairment of goodwill Loss on extinguishment of debt Loss (gain) on cost method and equity method investments Share-based payment expense Changes in operating assets and liabilities: Merchandise inventory - net Other operating assets Accounts payable Other operating liabilities Net cash provided by operating activities 74 (600) (376) (637) (654) 4.296 (1,289) (110) 1,720 437 6,193 13 5,065 (1,373) 1,393 (981 1,114 Cash flows from investing activities: Purchases of investments Proceeds from sale maturity of investments Capital expenditures Proceeds from sale of property and other long-term assets Acquisition of business - net (743) 693 (1,484) 163 (1,174) (1.123) 76 45 Other - net (509) 13 (1,441) Net cash used in investing activities (1,369) (1,080) (415) 625 2.968 Cash flows from financing activities: Net change in commercial paper Net proceeds from issuance of debt Repayment of long-term debt Proceeds from issuance of common stock under share-based payment plans Cash dividend payments Repurchase of common stock Other - net Net cash used in financing activities 220 3,972 (1,113) 118 (1.618) (4,313) (1) (2,735) (326) 114 (1,455) (3.037 (2,849 139 (1.288 (3,192) (10) (3,607 (5,124) (12) 13 193 (23) Effect of exchange rate changes on cash Net increase (decrease) in cash and cash equivalents, including cash classified within current assets held for sale Less: Net increase (decrease) in cash classified within current assets held for sale Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year 588 716 511 Seeman atas talidated financial statemente a. c. 1. Compute the following ratios for the most recent year and include them in an Appendix to this report. [The calculations for each of these ratios can be found in your textbook. The numbers you use for these ratios should agree with the numbers in financial statements. Show all of your supporting work). Return on Equity (Return on Owners' Investment) b. Return on Assets (Return on Total Investment) Earnings per Share d. Net Profit Margin Current Ratio f. Quick Ratio Accounts Receivable Turnover h. Inventory Turnover Times interest earned j. Debt to Equity ratio k. Price/Earnings (P/E) ratio (Use the market price as of the balance sheet date). e. g. i. 2. Identify a company that you believe is the closest competitor ("competitor") to your company. Compute the ratios in (1) above for the competitor and include them in the Appendix Based on your computations in (1) and (2) above, address the following: Profitability: 1. What is your assessment of the profitability of your firm in the most recent year? How does your firm's profitability compare with that of the competitor? 2. Compare the cash flows from operating activities for your firm with the net income for the most recent year. What factors have contributed to the difference between these two numbers? Liquidity and Capital Structure: 1. Will the company be able to meet its obligations as they become due? How does your firm's liquidity compare with that of the competitor? 2. What is the capital structure of your company (1.e., what percentage of the total assets of the company are financed through liabilities and what percentage through stockholders' equity)? 3. Is the capital structure of the competitor significantly different from that of your company? Briefly explain your answer. International Financial Reporting Standards (IFRS) 1. What is the purpose of IFRS? 2. What is the IASB? 3. What are some of the overall differences between US GAAP and IFRS? 4. If your company adopted IFRS: (a) Would its reporting for inventory differ? Briefly explain. (b) Identify other areas that would be impacted if your company adopted IFRS. Lowe's Companies, Inc. Consolidated Statements of Earnings (In millions, except per share and percentage data) January 31, 2020 February 2, 2018 Amount % Sales Amount % Sales 100.00% Fiscal Years Ended February 1, 2019 Amount 71,309 48,401 22,908 % Sales 100.00% S S 100.00% S. 72,148 49,205 22,943 68.20 67.88 68.619 46,185 22,434 67.31 31.80 32.12 32.69 24.41 21.04 Current Earnings 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 21.30 1.75 8.75 2.07 15,367 1,262 6,314 691 2.05 17,413 1,477 4,018 624 5.64 9.60 0.96 0.88 0.92 14.444 1.404 6,586 633 464 5,489 2.042 3,447 0.68 8.00 5.623 4.76 7.79 1.86 5.93% 3.394 1.080 1.52 1.342 4.281 2.98 S S 2,314 3.24% S 5.02% S 5.49 S 2.84 S 4.09 Basic earnings per common share Diluted earnings per common share Cash dividends per share $ S 2.84 S 4.09 5.49 2.13 S $ 1.85 S 1.58 Lowe's Companies, Inc. Consolidated Statements of Comprehensive Income (In millions, except percentage data) January 31, 2020 Fiscal Years Ended February 1, 2019 Amount February 2, 2018 Amount % Sales % Sales Amount % Sales S 4,281 5.93 % $ 2,314 S 3.24 % (0.30) 3,447 251 5.02% 0.37 94 0.13 (221) (0.03 1 Net earnings Foreign currency translation adjustments - net of tax Other Other comprehensive income/(loss) Comprehensive income See accomnaming notes to consolidated financial statements (21) 73 0.10 (220) 0.37 (0.30) 2.94 % 251 3,698 4.354 6.03 % S 2,094 $ 5.39% 716 $ 511 218 Assets Current assets: Cash and cash equivalents Short-term investments Merchandise inventory - net Other current assets Total current assets Property, less accumulated depreciation Operating lease right-of-use assets Long-term investments Deferred income taxes - net Goodwill 160 13,179 1,263 15,318 18,669 3,891 372 216 12,561 938 14.228 18,432 256 294 303 303 Other assets 702 995 Total assets 39,471 34.508 1.941 722 1,110 8.279 Liabilities and shareholders' equity Current liabilities: Short-term borrowings Current maturities of long-term debt Current operating lease liabilities Accounts payable Accrued compensation and employee benefits Deferred revenue Other current liabilities Total current liabilities Long-term debt, excluding current maturities Noncurrent operating lease liabilities Deferred revenue - extended protection plans Other liabilities Total liabilities 597 501 7.659 684 1.219 2.581 662 1.299 15,182 16,768 3.943 2.425 14,497 14.391 894 827 712 37,499 1.149 30.864 Commitments and contingencies Shareholders' equity: Preferred stock - $5 par valve, none issued Common stock - $0.50 par value; Shares issued and outstanding January 31, 2020 February 1, 2019 Capital in excess of par value Retained earnings Accumulated other comprehensive loss Total shareholders' equity Total liabilities and shareholders' equity 763 801 381 401 1.727 (136) 1,972 39,471 3,452 (209) 3,644 34,508 S Lowe's Companies, Inc. Consolidated Statements of Shareholders' Equity (In millions, except per share data) Common Stock Capital in Excess of Par Value Total Shareholders' Equity Shares Amount Accumulated Other Comprehensive Income/(Loss) (240) 866 S 433 S Retained Earnings 6.241 3,447 S s S 6,434 251 3,447 251 (1,324) 99 (1.324 99 (215) 401 (20) (2.939) 4 138 830 s 415 S 22 s s 11 S 5,425 33 2,314 (220) (1,500 Balance February 3, 2017 Net earnings Other comprehensive income Cash dividends declared, $1.58 per share Share-based payment expense Repurchase of common stock Issuance of common stock under share-based payment plans Balance February 2, 2018 Cumulative effect of accounting change Net earnings Other comprehensive loss Cash dividends declared, $1.85 per share Share-based payment expense Repurchase of common stock Issuance of common stock under share-based payment plans Balance February 1, 2019 Cumulative effect of accounting change Net earnings Other comprehensive income Cash dividends declared, $2.13 per share Share-based payment expense Repurchase of common stock Issuance of common stock under share-based payment plans Balance January 31, 2020 See accompanying notes to consolidated financial statements. FI (32) (16) (209 (2.820) 113 (3.174 140 5,873 33 2.314 (220) (1,500) 74 3,045) 115 3,644 (263) 4,281 73 (1.653) 98 (4,325) 117 1,972 801 S 401 S S S (209) S 3,452 (263) 4.281 73 (1,653) 98 (41) (21) (214) (4,090) 116 763 S 381 S S 1,727 S (136) $ 4.281 S 2.314 $ 3.447 1.410 1.60 1,540 468 (151) Cash flows from operating activities: Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization Noncash lease expense Deferred income taxes Loss on property and other assets - net Impairment of goodwill Loss on extinguishment of debt Loss (gain) on cost method and equity method investments Share-based payment expense Changes in operating assets and liabilities: Merchandise inventory - net Other operating assets Accounts payable Other operating liabilities Net cash provided by operating activities 74 (600) (376) (637) (654) 4.296 (1,289) (110) 1,720 437 6,193 13 5,065 (1,373) 1,393 (981 1,114 Cash flows from investing activities: Purchases of investments Proceeds from sale maturity of investments Capital expenditures Proceeds from sale of property and other long-term assets Acquisition of business - net (743) 693 (1,484) 163 (1,174) (1.123) 76 45 Other - net (509) 13 (1,441) Net cash used in investing activities (1,369) (1,080) (415) 625 2.968 Cash flows from financing activities: Net change in commercial paper Net proceeds from issuance of debt Repayment of long-term debt Proceeds from issuance of common stock under share-based payment plans Cash dividend payments Repurchase of common stock Other - net Net cash used in financing activities 220 3,972 (1,113) 118 (1.618) (4,313) (1) (2,735) (326) 114 (1,455) (3.037 (2,849 139 (1.288 (3,192) (10) (3,607 (5,124) (12) 13 193 (23) Effect of exchange rate changes on cash Net increase (decrease) in cash and cash equivalents, including cash classified within current assets held for sale Less: Net increase (decrease) in cash classified within current assets held for sale Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year 588 716 511 Seeman atas talidated financial statemente
