Question
Lumber Liquidators, Inc., competes with Lowes in product lines such as hardwood flooring, moldings, and noise-reducing underlay. The two companies reported the following financial results
Lumber Liquidators, Inc., competes with Lowes in product lines such as hardwood flooring, moldings, and noise-reducing underlay. The two companies reported the following financial results in fiscal 2013:
Lumber Liquidators Lowes
Gross Profit Percentage | 41.1% | 34.6% |
Net Profit Margin | 7.7% | 4.3% |
Return on equity | 28.5% | 17.8% |
Earnings per share | $2.77 | $2.18 |
Required:
a. Calculate the difference in gross profit percentage between Lumber Liquidators and Lowes.
b. Calculate the difference in net profit margin between Lumber Liquidators and Lowes.
c. Using your answers to requirements 1 and 2, identify the company that best controls operating expenses other than cost of goods sold.
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