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Perform a horizontal analysis of Lowes Companies income statements and balance sheets as of January 29, 2016.

In performing this analysis, consider any notable trends or changes that you observe that may provide useful information concerning its financial condition. Be as detail as possible.

Also use as many years? worth of statements as you feel are necessary. You should write up your results in paragraph form. Use as many analyses as necessary to show a good picture of the company.

Use the Excel area below to set up your analyses and place text boxes below your Excel analyses to

explain your answer.

Lowes Companies Inc
10-K
Income Statement
(Amounts in millions except per share data)
Fiscal Year Ended	1/29/2016	1/30/2015	1/31/2014	2/1/2013
Net Sales	$ 59,074	$ 56,223	$ 53,417	$ 50,521
Cost of Sales	38,504	36,665	34,941	33,194
Gross Margin	20,570	19,558	18,476	17,327
Expenses:
Selling, General and Administrative	14,115	13,281	12,865	12,244
Depreciation	1,484	1,485	1,462	1,523
Interest - Net	552	516	476	423
Total Expenses	16,151	15,282	14,803	14,190
Pre-Tax Earnings	4,419	4,276	3,673	3,137
Income Tax Provision	1,873	1,578	1,387	1,178
Net Earnings	$ 2,546	$ 2,698	$ 2,286	$ 1,959
Basic EPS	$2.73	$2.71	$2.14	$1.69
Diluted EPS	$2.73	$2.71	$2.14	$1.69
Dividends Per Share	$1.07	$0.87	$0.70	$0.62

Lowes Companies Inc
10-K
Balance Sheet
(Amounts in millions)
Fiscal Year Ended	1/29/2016	1/30/2015	1/31/2014	2/1/2013
ASSETS
Current assets:
Cash and cash equivalents	$ 405	$ 466	$ 391	$ 541
Short-term investments	307	125	185	125
Merchandise inventories - net	9,458	8,911	9,127	8,600
Other current assets	391	349	341	301
Total current assets	$ 10,561	$ 9,851	$ 10,044	$ 9,567
Property, less accumulated depreciation	19,577	20,034	20,834	21,477
Long-term investments	222	354	279	271
Deferred income taxes - net	241	133	-	-
Other assets	665	1,349	1,323	1,134
Total assets	$ 31,266	$ 31,721	$ 32,480	$ 32,449
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities:
Short-term borrowings	$ 43	$ -	$ 386	$ -
Current maturities of long-term debt	1,061	552	49	47
Accounts payable	5,633	5,124	5,008	4,657
Accrued compensation & employee benefits	820	773	785	670
Deferred revenue	1,078	979	892	824
Other current liabilities	1,857	1,920	1,756	1,510
Total current liabilities	$ 10,492	$ 9,348	$ 8,876	$ 7,708
Long-term debt, excluding current maturities	11,545	10,806	10,086	9,030
Deferred income taxes - net	-	-	39	238
Deferred revenue - extended protection plans	729	730	730	715
Other liabilities	846	869	896	901
Total liabilties	$ 23,612	$ 21,753	$ 20,627	$ 18,592
Shareholders' equity:
Common stock	$ 455	$ 480	$ 515	$ 555
Capital in excess of par value	-	-	-	26
Retained earnings	7,593	9,591	11,355	13,224
Accumulated other comprehensive income (loss)	(394)	(103)	(17)	52
Total shareholders' equity	7,654	9,968	11,853	13,857
Total liabilities and shareholders equity	$ 31,266	$ 31,721	$ 32,480	$ 32,449

Part 2

Ratio Analysis

Assess Lowes Companies concerning liquidity, solvency, profitability, and stock performance as of January 29, 2016. For each area, you should calculate the ratios we discussed in class and provide an analysis of the ratios calculated. It would also be helpful to compare Lowes?s ratios with Home Depot?s ratios. I include historical stock price information and outstanding common share information below.

Liquidity Ratios
Fiscal Year Ended	1/31/2016	2/1/2015	2/2/2014	2/3/2013
Current ratio	1.01	1.05	1.13	1.24
Working capital	$69	$503	$1,168	$1,859
Acid-test ratio	0.07	0.06	0.06	0.09
Inventory turnover (times)	4.19	4.07	3.94
Days sales in inventory	87.06	89.78	92.59
Accounts receivable turnover (times)	273.49	362.73	344.63
Days sales in receivables	1.33	1.01	1.06
Free cash flow	$3,587	$4,049	$3,171	$2,551
Average inventory	$9,184.5	$9,019.0	$8,863.5
Average A/R	$216.0	$155.0	$155.0

Assessment:

Solvency Ratios
Fiscal Year Ended	1/31/2016	2/1/2015	2/2/2014	2/3/2013
Debt to equity	1.71	1.24	0.99	0.79
Interest coverage	9.01	9.29	8.72	8.42
Long term liabilities	$13,120	$12,405	$11,751	$10,884

Assessment:

Profitability Ratios
Fiscal Year Ended	1/31/2016	2/1/2015	2/2/2014	2/3/2013
Asset turnover	$1.22	$1.75	$1.65
Return on sales	4.85%	5.38%	4.83%	4.40%
Gross margin %	34.82%	34.79%	34.59%	34.30%
Return on assets	9.09%	9.42%	7.95%
Return on equity	28.90%	24.73%	17.78%
Average interest rate	2.43%	2.44%	2.43%
Average total assets	$31,493.5	$32,100.5	$32,464.5
Income tax rate	42.39%	36.90%	37.76%	37.55%
Net of tax interest expense	$318.03	$325.58	$296.25	$264.16
Adjusted net income	$2,864.0	$3,023.6	$2,582.3	$2,223.2
Average equity	$8,811.0	$10,910.5	$12,855.0
Average total liabilities	$22,682.5	$21,190.0	$19,609.5

Assessment:

DuPont Analysis of ROA
Fiscal Year Ended	1/31/2016	2/1/2015	2/2/2014
Return on assets (calculated)	9.09%	9.42%	7.95%
Return on sales	4.85%	5.38%	4.83%
Asset turnover	$1.22	$1.75	$1.65
Product	5.93%	9.42%	7.95%

Assessment:

Stock Ratios
Fiscal Year Ended	1/31/2016	2/1/2015	2/2/2014	2/3/2013
Book value per common share	$8.41	$10.38	$11.51	$12.48
Earnings per share (basic)	$2.73	$2.71	$2.14	$1.69
Earnings per share (diluted)	$2.73	$2.71	$2.14	$1.69
P/E Ratio	26.15	24.54	20.88	21.68
Dividend yield	1.50%	1.31%	1.57%	1.69%
Dividend payout	39.19%	32.10%	32.71%	36.69%
Book value of equity	$7,654	$9,968	$11,853	$13,857
Common shares outstanding (millions)	910	960	1,030	1,110
Adjusted closing price	$71.40	$66.50	$44.68	$36.64
Dividends per share	$1.07	$0.87	$0.70	$0.62

Assessment:

You will see below 4 "green" tabs and 5 "red tabs". Green Tabs Represent the information you will need to compute the answers required in the re The Red tabs represent where you will place your answers. Each red tab requires 2 things: (1) Calculated Answers in Each Box (2) Explanations in the text b In each red tab you will need to fill in each box where a calcuclated amount is required. The text box found in each red tab area is for you to explain what your calculated answers in th For instance, if a current ratio goes up then it shows the creditor that the company is has more are better short term risk. Using the accompanying financial statements (found in the green tabs), assess The Home Depot liquidity, solvency, profitability, and stock performance. For each area, you should calculate the discussed in class and provide a brief analysis of the ratios calculated. You do not need to perfo analysis for this assignment. Legend for Tabs Listed Below answers required in the red tabs. Explanations in the text box area mount is required. r calculated answers in the boxes represent. the company is has more liquidity and they s), assess The Home Depot concerning , you should calculate the ratios we You do not need to perform vertical Green Tabs - Information Required for Red Tab Answers 1. SP - Historical Stock Prices 2. IS - Income Statement 3. BS - Balance Sheet 4. CF - Statement of Cash Flows Red Tabs - You will supply your answers in these tabs There are 2 sets of answers required 1. In the Boxes you will put your calculations for the ratio 2. In the text box you will write text about what your ratios outside investor, creditor, etc. 1. 2. 3. 4. 5. Short-Term - Answers to your short term ratios Long-Term - Answers to your long term ratios Profitability - Answers to your profitability ratios DuPont Analysis - Answers to your DuPont Analysis Ratios Stock - Answers to your Stock Ratios Remember, ratio answers in the boxes and written answers on w mean in the text box. Once you are done with your answers - ema to me to the following email address: yessman@nova.edu ed for Red Tab Answers nswers in these tabs ired your calculations for the ratio required write text about what your ratios mean to an your short term ratios your long term ratios your profitability ratios your DuPont Analysis Ratios your Stock Ratios boxes and written answers on what the ratios ith your answers - email them email address: Historical Stock Prices Fiscal Year Ended 1/31/2016 2/1/2015 2/2/2014 2/3/2013 Adjusted Closing Price $125.07 $101.80 $73.34 $62.92 Common Shares Outstanding (m 1,252 1,307 1,380 1,486 HOME DEPOT INC $ in millions Year Ending NET SALES Cost of sales GROSS PROFIT Operating Expenses: Selling, General and Administrative Depreciation and Amortization Total Operating Expenses OPERATING INCOME Interest and Other (Income) Expense: Interest and Investment Income Interest Expense Other 1/31/2016 $88,519 58,254 30,265 2/1/2015 $83,176 54,787 28,389 2/2/2014 $78,812 51,897 26,915 2/3/2013 $74,754 48,912 25,842 16,801 1,690 18,491 11,774 16,280 1,640 17,920 10,469 16,122 1,627 17,749 9,166 16,508 1,568 18,076 7,766 (166) 919 0 (337) 830 0 (12) 711 0 (20) 632 (67) 753 11,021 4,012 $7,009 493 9,976 3,631 $6,345 699 8,467 3,082 $5,385 545 7,221 2,686 $4,535 Basic earnings per share Diluted earnings per share $5.49 $5.46 $4.74 $4.71 $3.78 $3.76 $3.03 $3.00 Dividends per share $2.36 $1.88 $1.56 $1.16 Interest and Other, net Earnings before income taxes Provision for Income Taxes NET EARNINGS HOME DEPOT INC $ in millions As of 1/31/2016 2/1/2015 2/2/2014 2/3/2013 ASSETS Current assets: Cash and cash equivalents Accounts receivable, net Merechandise inventories Other current assets $2,216 1,890 11,809 1,078 $1,723 1,484 11,079 1,016 $1,929 1,398 11,057 895 $2,494 1,395 10,710 773 Total Current Assets 16,993 15,302 15,279 15,372 Property & Equipment, at cost Less Accumulated Depreciation and Amortization Net Property & Equipment 39,266 17,075 22,191 38,513 15,793 22,720 39,064 15,716 23,348 38,491 14,422 24,069 Goodwill Other assets TOTAL ASSETS 2,102 1,263 $42,549 1,353 571 $39,946 1,289 602 $40,518 1,170 473 $41,084 LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities: Short-term debt Accounts payable Accrued salaries & related expenses Sales taxes payable Deferred revenue Income taxes payable Current installments of long-term debt Other accrued expenses $350 6,565 1,515 476 1,566 34 77 1,943 $290 5,807 1,391 434 1,468 35 38 1,806 $0 5,797 1,428 396 1,337 12 33 1,746 $0 5,376 1,414 472 1,270 22 1,321 1,587 Total current liabilities 12,526 11,269 10,749 11,462 Long-term debt, excluding current installments Other long-term liabilities Deferred income taxes Total liabilities 20,888 1,965 854 36,233 16,869 1,844 642 30,624 14,691 2,042 514 27,996 9,475 2,051 319 23,307 Shareholders equity: Common stock Paid-in capital Retained earnings Accumulated other comprehensive income (loss) Treasury stock, at cost Total shareholders equity 88 9,347 30,973 (898) (33,194) 6,316 88 8,885 26,995 (452) (26,194) 9,322 88 8,402 23,180 46 (19,194) 12,522 88 7,948 20,038 397 (10,694) 17,777 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $42,549 $39,946 $40,518 $41,084 HOME DEPOT INC $ in millions Year Ending OPERATING ACTIVITIES: Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization Stock-based compensation expense Gain on sales of investments Changes in Assets and Liabilities, net of the effects of acquisition and disposition Receivables, net Merchandise inventories Other current assets Accounts payable and accrued expenses Deferred revenue Income taxes payable Deferred income taxes Other Net cash provided by operating activities INVESTING ACTIVITIES: Capital expenditures Proceeds from sales of investments Payments for business acquired Proceeds from sales of property & equipment Net cash used by investing activities FINANCING ACTIVITIES: Proceeds from short-term borrowings, net Proceeds from long-term borrowings, net of discount Repayments of long-term debt Repurchases of common stock Proceeds from sales of common stock Cash dividends paid to stockholders 1/31/2016 2/1/2015 2/2/2014 2/3/2013 $7,009 $6,345 $5,385 $4,535 1,863 244 (144) 1,786 225 (323) 1,757 228 0 1,684 218 97 (181) (546) (5) 888 109 154 15 (33) (81) (124) (199) 244 146 168 159 (104) (15) (455) (5) 605 75 119 (31) (35) (143) (350) 93 698 121 87 107 (172) $9,373 $8,242 $7,628 $6,975 (1,503) 144 (1,666) 43 (1,442) 323 (200) 48 (1,389) 0 (206) 88 (1,312) 0 (170) 50 ($2,982) ($1,271) ($1,507) ($1,432) 60 3,991 (39) (7,000) 228 (3,031) 290 1,981 (39) (7,000) 252 (2,530) 0 5,222 (1,289) (8,546) 241 (2,243) 0 0 (32) (3,984) 784 (1,743) Other financing activities 4 (25) (37) (59) ($5,787) ($7,071) ($6,652) ($5,034) $604 (111) ($100) (106) ($531) (34) $509 (2) Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 1,723 $2,216 1,929 $1,723 2,494 $1,929 1,987 $2,494 SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS MADE FOR Interest, net of capitalized interest Income taxes $874 $3,853 $782 $3,435 $639 $2,839 $617 $2,482 Net cash used by financing activities Change in Cash and Cash Equivalents Effect of exchange rate changes on cash and cash equivalents Liquidity Ratios Calculate the Ratios Below: Fiscal Year Ended 1/31/2016 Current ratio 1.36 Working capital $4,467 Acid-test ratio 0.33 Inventory turnover (times) 5.09 Days sales in inventory 71.70 Accounts receivable turnover (times) 52.47 Days sales in receivables 6.96 Free cash flow $7,870 2/1/2015 1.36 $4,033 0.28 4.95 73.74 57.72 6.32 $6,800 2/2/2014 1.42 $4,530 0.31 4.77 76.55 56.44 6.47 $6,239 Average inventory $11,444.0 $11,068.0 $10,883.5 Average A/R $1,687.0 $1,441.0 $1,396.5 2/3/2013 1.34 $3,910 0.34 $5,663 Solvency Ratios Calculate the Ratios Below: Fiscal Year Ended 1/31/2016 Debt to equity 3.75 Interest coverage 12.81 2/1/2015 2.08 12.61 2/2/2014 1.38 12.89 2/3/2013 0.67 12.29 Long term liabilities $19,355 $17,247 $11,845 $23,707 Profitability Ratios Calculate the Ratios Below: Fiscal Year Ended 1/31/2016 Asset turnover $2.15 Return on sales 8.58% Gross margin % 34.19% Return on assets 18.41% Return on equity 89.64% Average interest rate 2.75% 2/1/2015 $2.07 8.26% 34.13% 17.08% 58.09% 2.83% 2/2/2014 $1.93 7.41% 34.15% 14.31% 35.55% 2.77% 2/3/2013 6.60% 34.57% Average total assets $41,247.5 $40,232.0 $40,801.0 Income tax rate 36.40% 36.40% 36.40% 37.20% Net of tax interest expense $584.45 $527.90 $452.19 $396.91 Adjusted net income $7,593.5 $6,872.9 $5,837.2 $4,931.9 Average equity $7,819.0 $10,922.0 $15,149.5 Average total liabilities $33,428.5 $29,310.0 $25,651.5 DuPont Analysis of ROA Calculate the Ratios Below: Fiscal Year Ended 1/31/2016 Return on assets (calculated) 18.41% 2/1/2015 17.08% 2/2/2014 14.31% Return on sales Asset turnover Product 8.26% $2.07 17.08% 7.41% $1.93 14.31% 8.58% $2.15 18.41% Stock Ratios Calculate the Ratios Below: Fiscal Year Ended 1/31/2016 Book value per common share $5.04 Earnings per share (basic) $5.49 Earnings per share (diluted) $5.46 P/E Ratio 22.91 Dividend yield 1.89% Dividend payout 43.22% Book value of equity Common shares outstanding (millions) Adjusted closing price Dividends per share $6,316 1,252 $125.07 $2.36 2/1/2015 $7.13 $4.74 $4.71 21.61 1.85% 39.92% 2/2/2014 $9.07 $3.78 $3.76 19.51 2.13% 41.49% 2/3/2013 $11.96 $3.03 $3.00 20.97 1.84% 38.67% $9,322 1,307 $101.80 $1.88 $12,522 1,380 $73.34 $1.56 $17,777 1,486 $62.92 $1.16 ACT 5140 - Accounting for Decision Makers Lowes Companies Assignment due 10-8-2016 Directions: Answer all the questions. Please use the Excel workbook below for your answers Be sure to show ho include your name at the top of the first page of your file. The assignment is due by 11:59 PM on October 7, 201 To do the best paper you should use information from various areas of the 10-k for Lowes as a basis for some o Discussion and Analysis) and Notes to the financial statements are a good place to start, but there are other ar valuable in doing your analysis. It is best to be familair with what is in the 10-k report before starting any analy Please run spell check and proofread your answers. Poorly written answers are not only hard to read, they loose t you a lower grade. Since this project will take some time to do, it is best that you begin this project as soon as p Part 1 Assess Lowes Companies concerning liquidity, solvency, profitability, and stock performance as of January 29, 201 discussed in class and provide an analysis of the ratios calculated. It would also be helpful to compare Lowes's rati price information and outstanding common share information below. Part 2 In Tab 6 at the end: Vertical and Horizontal Analysis Perform a vertical and horizontal analysis of Lowes Companies income statements and balance sheets as of Janua notable trends or changes that you observe that may provide useful information concerning its financial condition feel necessary. You should write up your results in paragraph form. Tab 6 - (Vert-Horiz Analysis) contains full details of what is required. our answers Be sure to show how you did your calculations. Also, please be sure to by 11:59 PM on October 7, 2016. for Lowes as a basis for some of your answers. The MD&A (Management's to start, but there are other areas in the 10-k that can prove to be even more report before starting any analysis work. t only hard to read, they loose the meaning of what you are trying to say thus giving u begin this project as soon as possible. rformance as of January 29, 2016. For each area, you should calculate the ratios we helpful to compare Lowes's ratios with Home Depot's ratios. I include historical stock s and balance sheets as of January 29, 2016. In performing this analysis, consider any oncerning its financial condition. Also use as many years' worth of statements as you You will see below 3 "green" tabs and 6 "red tabs". Green Tabs Represent the information you will need to compute the answers required in the re The Red tabs represent where you will place your answers. Each red tab requires 2 things: (1) Calculated Answers in Each Box (2) Explanations in the text b In each red tab you will need to fill in each box where a calcuclated amount is required. The text box found in each red tab area is for you to explain what your calculated answers in th represent. For instance, if a current ratio goes up then it shows the creditor that the company is has more and they are better short term risk. Using the accompanying financial statements (found in the green tabs), assess The Home Depot concerning liquidity, solvency, profitability, and stock performance. For each area, you should ca the ratios we discussed in class and provide a brief analysis of the ratios calculated. You do not perform vertical analysis for this assignment. Legend for Tabs Listed Below nswers required in the red tabs. Explanations in the text box area mount is required. calculated answers in the boxes he company is has more liquidity , assess The Home Depot each area, you should calculate s calculated. You do not need to Green Tabs - Information Required for Red Tab Answers 1. SP - Historical Stock Prices 2. IS - Income Statement 3. BS - Balance Sheet 4. CF - Statement of Cash Flows Red Tabs - You will supply your answers in these tabs There are 2 sets of answers required 1. In the Boxes you will put your calculations for the ratio required 2. In the text box you will write text about what your ratios mean to an outside investor, creditor, etc. 1. 2. 3. 4. 5. 6. Short-Term - Answers to your short term ratios Long-Term - Answers to your long term ratios Profitability - Answers to your profitability ratios DuPont Analysis - Answers to your DuPont Analysis Ratios Stock - Answers to your Stock Ratios Vert-Horiz Analysis - Answers to this type of analysis Remember, ratio answers in the boxes and written answers on what the ratios mean in the text box. nswers abs s for the ratio required what your ratios mean to an ratios atios y ratios alysis Ratios os nalysis en answers on what the Lowes Companies Inc 10-K Income Statement (Amounts in millions except per share data) Fiscal Year Ended Net Sales Cost of Sales Gross Margin Expenses: Selling, General and Administrative Depreciation Interest - Net Total Expenses Pre-Tax Earnings Income Tax Provision Net Earnings Basic EPS Diluted EPS Dividends Per Share 1/29/2016 1/30/2015 1/31/2014 2/1/2013 $ 59,074 38,504 20,570 $ 56,223 36,665 19,558 $ 53,417 34,941 18,476 $50,521 33,194 17,327 14,115 1,484 552 16,151 4,419 1,873 $ 2,546 13,281 1,485 516 15,282 4,276 1,578 $ 2,698 12,865 1,462 476 14,803 3,673 1,387 $ 2,286 12,244 1,523 423 14,190 3,137 1,178 $ 1,959 $2.73 $2.73 $1.07 $2.71 $2.71 $0.87 $2.14 $2.14 $0.70 $1.69 $1.69 $0.62 Lowes Companies Inc 10-K Balance Sheet (Amounts in millions) Fiscal Year Ended ASSETS Current assets: Cash and cash equivalents Short-term investments Merchandise inventories - net Other current assets Total current assets Property, less accumulated depreciation Long-term investments Deferred income taxes - net Other assets Total assets LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities: Short-term borrowings Current maturities of long-term debt Accounts payable Accrued compensation & employee benefits Deferred revenue Other current liabilities Total current liabilities Long-term debt, excluding current maturities Deferred income taxes - net Deferred revenue - extended protection plans Other liabilities Total liabilties Shareholders' equity: Common stock Capital in excess of par value Retained earnings Accumulated other comprehensive income (loss) Total shareholders' equity 1/29/2016 1/30/2015 1/31/2014 2/1/2013 $ 405 307 9,458 391 $ 10,561 $ 466 125 8,911 349 $ 9,851 $ 391 185 9,127 341 $ 10,044 $ 19,577 222 241 665 $ 31,266 20,034 354 133 1,349 $ 31,721 20,834 279 1,323 $ 32,480 21,477 271 1,134 $ 32,449 $ 43 1,061 5,633 820 1,078 1,857 $ 10,492 $ 552 5,124 773 979 1,920 $ 9,348 $ 386 49 5,008 785 892 1,756 $ 8,876 $ 11,545 729 846 $ 23,612 10,806 730 869 $ 21,753 10,086 39 730 896 $ 20,627 9,030 238 715 901 $ 18,592 $ 541 125 8,600 301 $ 9,567 47 4,657 670 824 1,510 $ 7,708 455 $ 480 $ 515 $ 555 26 7,593 9,591 11,355 13,224 (394) (103) (17) 52 7,654 9,968 11,853 13,857 Total liabilities and shareholders equity $ 31,266 $ 31,721 $ 32,480 $ 32,449 Lowes Companies Inc 10-K Statement of Cash Flows (Amounts in millions) Fiscal Year Ended Cash flows from operating activities: Net earnings 1/29/2016 1/30/2015 1/31/2014 2/1/2013 $ Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation and amortization Deferred income taxes Loss on property & other assets - net Loss on 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 $ Cash flows from investing activities: Purchases of investments Proceeds from sale / maturity of investments Capital expenditures Contributions to equity method investments - net Proceeds from sale of property & other long-term assets Acquisitions of business - net Other - net Net cash used in investing activities Cash flows from financing activities: Net change in short-term borrowings Net proceeds from issuance of long-term debt Repayment of long-term debt Proceeds from issuance of common stock under share-based payment plans Cash dividends paid 2,546 2,698 $ 2,286 $ 1,959 1,587 (68) 33 591 117 1,586 (124) 25 57 119 1,562 (162) 64 52 100 1,623 (140) 83 48 ### (582) (34) 524 70 170 83 127 188 (396) (5) 291 319 (244) (87) 303 117 4,111 $ 3,762 (759) 709 (940) (173) 75 (203) 5 (1,444) 1,837 (1,211) (219) 130 4 4,784 (934) 884 (1,197) (125) 57 (28) $ $ $ 4,929 (820) 805 (880) (241) 52 ### (4) $ (1,343) $ (1,088) $ (1,286) $ (903) 43 1,718 (552) 125 (957) (386) 1,239 (48) 137 (822) 386 985 (47) 165 (733) 1,984 (591) 349 (704) Repurchase of common stock Other - net Net cash used in financing activities (3,925) 55 $ Effect of exchange rates on cash Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year (3,905) 24 (3,710) (15) (4,393) 22 (3,493) $ (3,761) $ (2,969) $(3,333) (9) (5) (6) 1 (61) 466 75 391 (150) 541 (473) 1,014 Cash and cash equivalents at end of year $ 405 $ 466 $ 391 SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS MADE FOR Interest, net of capitalized interest Income taxes $ $ 535 2,055 $ $ 504 1,534 $ $ 454 1,505 $ 541 $ 444 $ 1,404 Liquidity Ratios Calculate the Ratios Below: Fiscal Year Ended 1/31/2016 Current ratio Working capital Acid-test ratio Inventory turnover (times) Days sales in inventory Accounts receivable turnover (times) Days sales in receivables Free cash flow 2/1/2015 Average inventory Average A/R Explain the Ratios in the Text Box Below: Assessment: 2/2/2014 2/3/2013 Need to fill in these blanks with the ratio calculations required Be sure to show your work in each cell The ratios you computed above need to be explained in the assessment area below (like we did in the chat sessions) ent area below Solvency Ratios Calculate the Ratios Below: Fiscal Year Ended 1/31/2016 Debt to equity Interest coverage 2/1/2015 2/2/2014 Long term liabilities Explain the Ratios in the Text Box Below: Assessment: 2/3/2013 Need to fill in these blanks with the ratio callculations required Be sure to show your work in each cell either cell references or numbers used The ratios you computed above need to be explained in the assessment area below (like we did in the chat session) bers used Profitability Ratios Calculate the Ratios Below: Fiscal Year Ended 1/31/2016 Asset turnover Return on sales Gross margin % Return on assets Return on equity Average interest rate 2/1/2015 Average total assets Income tax rate Net of tax interest expense Adjusted net income Average equity Average total liabilities Explain the Ratios in the Text Box Below: Assessment : 2/2/2014 2/3/2013 Need to fill in these blanks with the ratio calculations required Be sure to show your work in each cell either cell references or numbers used The ratios you computed above need to be explained in the assessment area below (like we did in the chat session) bers used ent area below DuPont Analysis of ROA Calculate the Ratios Below: Fiscal Year Ended 1/31/2016 2/1/2015 2/2/2014 Return on assets (calculated) Return on sales Asset turnover Product Need to fill in these blanks Be sure to show your work Explain below the DuPont Therory (Use no less than 200 words) o fill in these blanks with the ratio calculations required e to show your work in each cell either cell references or numbers used Explain below the DuPont Therory (Use no less than 200 words)+A14 s than 200 words)+A14:L43 Stock Ratios Calculate the Ratios Below: Fiscal Year Ended 1/31/2016 2/1/2015 2/2/2014 2/3/2013 Book value per common share Earnings per share (basic) Earnings per share (diluted) P/E Ratio Dividend yield Dividend payout Book value of equity Common shares outstanding (millions) Adjusted closing price Dividends per share The ratios you computed a Explain the Ratios in the Text Box Below: Assessment: (like we did in the chat ses Need to fill in these blanks with the ratio calculations required Be sure to show your work in each cell either cell references or numbers used The ratios you computed above need to be explained in the assessment area below (like we did in the chat session) bers used Perform both a vertical and horizontal analysis of Lowes Companies income statement as of January 29, 2016. In performing this analysis, consider any notable trends or changes that you observe th information concerning its financial condition. You can use my chat 2 as a guide and sta would expect a more detailed analysis for this paper. Also use as many years' worth of statements as you feel are necessary. You should writ paragraph form. Use as many analyses as necessary to show a good picture of the com Use the Excel area below to set up your analyses and place text boxes below your Exce explain your answer. panies income statements and balance sheets nges that you observe that may provide useful chat 2 as a guide and starting point but I ecessary. You should write up your results in good picture of the company. xt boxes below your Excel analyses to Answer to Part I Fiscal Year Ended Vertical and Horizontal Analysis Lowe's Companies, Inc. Income Statement - Vertical Analysis (Amounts in millions, except per share data) 30-01-2015 31-01-2014 01-02-2013 Net Sales Cost of Sales Gross Margin Expenses: Selling, General and Administrative Depreciation Interest - Net Total Expenses Pre-Tax Earnings Income Tax Provision Net Earnings 100.00% 65.21% 34.79% 100.00% 65.41% 34.59% 100.00% 65.70% 34.30% 23.62% 2.64% 0.92% 27.18% 7.61% 2.81% 4.80% 24.08% 2.74% 0.89% 27.71% 6.88% 2.60% 4.28% 24.24% 3.01% 0.84% 28.09% 6.21% 2.33% 3.88% Vertical Analysis of Income Statement The vertical analysis of income statement does not show any major notable changes. The income statement shows a gradual improvement in the performance of the company during the past three years. The cost of sales for the year ended January 31, 2015 is 65.21% of the net sales as compared to 65.70% for the year ended February 1, 2013. During the same period gross margin of the company increased to 34.79% from 34.30%. Selling, general and administrative expenses and depreciation expenses for the company declined marginally whereas interest expenses for the company increased marginally. Lowe's Companies, Inc. Balance Sheet - Vertical Analysis (Amounts in millions, except per share data) 30-0131-0101-022015 2014 2013 Fiscal Year Ended ASSETS Current assets: Cash and cash equivalents Short-term investments Merchandise inventories - net Deferred income taxes - net Other current assets Total current assets 1.46% 0.39% 28.00% 0.72% 1.09% 31.67% 1.19% 0.57% 27.88% 0.77% 1.04% 31.46% 1.66% 0.38% 26.33% 0.66% 0.92% 29.95% Property, less accumulated depreciation Long-term investments Other assets Total assets 62.95% 1.11% 4.27% 100.00% 63.65% 0.85% 4.04% 100.00% 65.75% 0.83% 3.47% 100.00% 0.00% 1.73% 16.10% 2.43% 3.08% 6.03% 29.37% 33.98% 0.30% 2.29% 2.73% 68.68% 1.18% 0.15% 15.30% 2.40% 2.73% 5.36% 27.12% 30.81% 0.89% 2.23% 2.74% 63.79% 0.00% 0.14% 14.26% 2.05% 2.52% 4.62% 23.60% 27.64% 1.39% 2.19% 2.76% 57.58% 1.51% 0.00% 30.13% -0.32% 31.32% 1.57% 0.00% 34.69% -0.05% 36.21% 1.70% 0.08% 40.48% 0.16% 42.42% 100.00% 100.00% 100.00% LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities: Short-term borrowings Current maturities of long-term debt Accounts payable Accrued compensation & employee benefits Deferred revenue Other current liabilities Total current liabilities Long-term debt, excluding current maturities Deferred income taxes - net Deferred revenue - extended protection plans Other liabilities Total Liabilities Shareholders' equity: Common stock Capital in excess of par value Retained earnings Accumulated other comprehensive income (loss) Total shareholders' equity Total liabilities and shareholder's equity Vertical Analysis of Balance Sheet The current assets of the company are 31.67% of total assets for the year ended January 31, 2015 as compared to 29.95% for year ended February 01, 2013.The inventory increased from 26.33% to 28.00% for the same period. The properties of the company reduced from $21,477 million to $20,034 million which shows that the company has sold some of its properties. The total assets also decreased from $32,666 million to 31,827 million. The current liabilities of the company significantly increased from 23.60% of total liabilities in 2013 to 29.37% in 2015.Long term debts of the company increased from 27.64% to 33.98% in the year ended January 31, 2015. Total liabilities of the company also increased from $18,809 million in 2013 to $21,859 million in 2015. The company also observed a fall in retained earnings during this period. The retained earnings of the company declined from $13,224 million in 2013 to $9,591 in 2015. Fiscal Year Ended Lowe's Companies, Inc. Income Statement - Horizontal Analysis (Amounts in millions, except per share data) 30-01-2015 31-01-2014 01-02-2013 Net Sales Cost of Sales Gross Margin Expenses: Selling, General and Administrative Depreciation Interest - Net Total Expenses Pre-Tax Earnings Income Tax Provision Net Earnings Horizontal Analysis of Income Statement 5.25% 4.93% 5.86% 5.73% 5.26% 6.63% 0.62% 1.02% -0.13% 3.23% 1.57% 8.40% 3.24% 16.42% 13.77% 18.02% 5.07% -4.01% 12.53% 4.32% 17.09% 17.74% 16.69% -2.77% 2.91% 14.02% -1.76% 7.95% 10.40% 6.53% The net sales of the company increased by $2,806 million or 5.25% for the year ended January 31, 2015 as compared to $313 million or 0.62% for the year ended February 01, 2013. The gross margin of the company increased by 5.86% in 2015 as compared to a loss of 0.13% in 2013. The selling, general and administrative expenses of the company increased by 3.23% in 2015 as compared to 5.07% in 2014. The net earnings of the company increased to 18.02% in the year 2015 as compared to 16.69% and 6.53% in the year 2014 and 2013 respectively. The earnings per share and dividends per share of the company kept on increasing throughout the period and the shareholders were benefitted. Lowe's Companies, Inc. Balance Sheet - Horizontal Analysis (Amounts in millions, except per share data) 31-012015 31-01-2014 01-02-2013 Fiscal Year Ended ASSETS Current assets: Cash and cash equivalents Short-term investments Merchandise inventories - net Deferred income taxes - net Other current assets Total current assets Property, less accumulated depreciation Long-term investments Other assets Total assets LIABILITIES AND SHAREHOLDER'S EQUITY Current liabilities: Short-term borrowings Current maturities of long-term debt Accounts payable Accrued compensation & employee benefits Deferred revenue Other current liabilities 19.18% -32.43% -2.37% -8.73% 2.05% -2.10% -3.84% 26.88% 2.72% -2.76% -27.73% 48.00% 6.13% 16.13% 13.29% 5.23% -2.99% 2.95% 16.67% 0.20% -46.65% -56.29% 2.93% 18.58% 28.63% -2.86% -2.24% -46.23% 11.94% -2.66% -100.00% 1026.53% 2.32% -1.53% 9.75% 9.34% 0.00% 4.26% 7.54% 17.16% 8.25% 16.29% 0.00% -92.06% 7.01% 9.30% 2.87% -1.50% Total current liabilities Long-term debt, excluding current maturities Deferred income taxes - net Deferred revenue - extended protection plans Other liabilities Total Liabilities Shareholders' equity: Common stock Capital in excess of par value Retained earnings Accumulated other comprehensive income (loss) Total shareholders' equity Total liabilities and shareholder's equity 5.32% 15.15% -2.32% 7.23% -66.67% 0.00% -3.01% 4.69% 11.69% -36.04% 2.10% -0.55% 11.01% 28.36% -14.31% 1.56% 4.16% 10.47% -6.80% -7.21% -100.00% -14.13% -132.69% -14.46% 0.20% -10.63% 85.71% -16.58% 13.04% -16.19% -2.66% -15.54% 505.88% -15.90% -2.76% Horizontal Analysis of Balance Sheet The cash and cash equivalents of the company increased by 19.18% in the year ended January 31, 2015 as compared to decrease of 27.73% and 46.65% in the year 2014 and 2013. The increase was mainly due to the sale of assets by the company. The merchandise inventory of the company declined in the year 2015 by 2.37% whereas it increased in the year 2004 and 2013. The total current assets of the company declined by 2.10% in 2015 as compared to an increase of 5.23% in the year 2014. Property of the company decreased during past three years indicting that the company is selling its assets during last three years. The company has paid off its long term debt in 2015 and there was an outflow of $503 million for payment of debts in the year 2015. The current liabilities have increased by 5.32% in the year ended January 31, 2015 as compared to 15.15% in the year ended January 31, 2014. Long term debts of the company increased by 7.23% during the year 2015 as compared to 28.36% for the year ended 2013. Ratio Analysis Liquidity Ratios Fiscal year ended 31-01-2015 31-01-2014 01-02-2013 Liquidity Ratios Current Ratio Current Assets/Current liabilities 1.08 1.16 1.27 Working capital Current Assets-Current Liabilities $732 $1,420 $2,076 Acid-test ratio 0.06 0.06 0.09 Inventory Turnover Days sales in inventory Quick Assets/Current liabilities Cost of Goods Sold/ Average Inventory (Ending Inventory/ Cost of Goods Sold)*365 4.07 3.94 3.92 88.71 95.34 94.57 Average inventory (Beginning Inventory + Ending Inventory)/2 $9,019 $8,864 $8,478 The current ratio measures the ability of the company in paying its short term commitments. A current ratio of 2 is considered as an ideal ratio. The ratios of Lowe's are week as compared to that of Home Depot (HD). The current ratio of HD 1.36 for the year 2015 as compared to 1.08 of Lowe's, showing high ability of HD in pay off its short term obligations. The ratio of Lowe's was also below HD for the year 2014 and 2013. The working capital of Lowe's has declined during last three years and stood at $732 million for the year ended January 31, 2015 whereas working capital of HD stood at $4,033 for the same period. Decrease in working capital indicates decrease in the ability of the company to meet its day to day expenses. Acid-test ratio of 1 is considered as ideal ratio. The ratio of both the companies is below 1. But, being retail industry, the lower ratio is not a surprise. In comparing the acid-test ratio of both the companies, the ratio of HD is higher than that of Lowe's. Inventory turnover ratio calculates the number of times, during a period; the company has sold its inventory. Here again HD is superior to Lowe's. The ratio of HD stood at 4.90 as compared to 4.07 of Lowe's. Day's sale in inventory measures the number of days the goods remained in inventory before being sold. Here also HD is better than Lowe's. Solvency Ratios Fiscal year ended 31-01-2015 31-01-2014 01-02-2013 Solvency Ratio Debt Equity Ratio Total Liabilities/Total Equity 2.19 1.76 1.36 Interest Coverage Income before Interest and Taxes /Interest Expenses 9.29 8.72 8.42 Debt to equity ratio calculates the debts of the company in comparison to its total equity. The ratio of Lowe's stood at 2.19 for the year 2015 as compared to 2.08 of HD which shows that Lowe's is higher on debts. The interest coverage ratio calculates the number of times the company has more earnings than its interest payment obligations. The ratio of Lowe's is 9.29 for the year 2015 as compared to 12.61 of HD which means the financers and bankers will provide loans to HD much easily as compared to Lowe's. Profitability Ratios Fiscal year ended 31-01-2015 31-01-2014 01-02-2013 1.77 1.63 1.55 Profitability Ratios Asset Turnover Total Revenue/Total assets Return on sales Operating Income/Net Sales 11.16% 10.50% 10.06% Gross margin % Gross Margin/Sales 34.79% 34.59% 34.30% Return on assets Net Income/Average Total Assets 8.36% 6.99% 5.92% Return on equity 27.07% 19.29% 14.14% Average total assets Net Income/ Shareholders equity (Beginning Assets + Ending Assets)/2 $32,280 $32,699 $33,113 Income tax rate As per Annual Report 36.90% 37.80% 37.60% Asset turnover of HD is higher than that of Lowe's which indicates much efficient use of the assets by the management of HD. Return on sale, also known as operating ratio, of Lowe's is higher than that of HD. The return on sale for Lowe's stood at 11.16% for year 2015 as compared to 8.26% of HD. Gross margin of both the companies is almost same for both the companies. Return on assets of HD is almost double to that of Lowe's which indicates more efficient use of assets of the company by the management of HD. The ratio for HD stood at 17.08% as compared to 8.36% of Lowe's for the year 2015. Return on equity of HD is more than that of Lowe's. For Lowe's the return on equity is 27.07% as compared to 58.09% of HD for the year 2015. Income tax rate of Lowe's is a bit higher than that of HD. Stock Performance ratios Fiscal year ended 31-01-2015 31-01-2014 01-02-2013 Stock Performance Analysis Book value per Total Common Shareholder's common share Equity/No. Of Common Shares 10.38 11.51 12.48 Earnings per share $2.71 $2.14 $1.69 24.73 21.12 21.93 1.30% 1.55% 1.67% 32.10% 32.71% 36.69% As per Information Provided 960 1,030 1,110 As per Information Provided 67.01 45.2 37.06 As per Income Statement 0.87 0.7 0.62 P/E Ratio Dividend yield Dividend payout Common shares outstanding Adjusted closing price Dividends per share A per Income Statement Market Price per Share of Common Stock/EPS Cash Dividend per Share/ Market Value per Share Dividend per Share/ Earnings per Share Book value per share of both the companies has declined during previous years, but the book value per share of Lowe's is higher than that of HD. The book value of common share of Lowe's stood at $10.38 as compared to $7.13 of HD. Earnings per share was higher for HD as compared to Lowe's. Each shareholder of Lowe's earned $2.71 as compared to $4.71 of HD. Price to earnings ratio of Lowe's is higher and is 24.73 as compared to 22.58 of HD indicating that the investors are expecting a high growth in the price of stock of Lowe's. Both dividend yield and dividend payout of HD is higher than that of Lowe's indicating good return on investment to the shareholders. HD is also high n distribution of dividends. The company has distributed $1.88 dividend per common share to its shareholders as compared to $0.87 of Lowe's. DuPont analysis Fiscal year ended 31-01-2015 31-01-2014 01-02-2013 27.07% 19.29% 10.90% DuPont Analysis DuPont analysis Profit Margin*Total Assets Turnover*Financial Leverage DuPont analysis of Lowe's has shown a good increase during last three years. It means that the company has increased the rate of return of its investors in an effective and efficient manner. The ratio for the company stood at 27.07% for the year 2015 as compared to 19.29% for the year ended 2014. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 29, 2016 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _________ Commission file number 1-7898 LOWE'S COMPANIES, INC. (Exact name of registrant as specified in its charter) NORTH CAROLINA (State or other jurisdiction of incorporation or organization) 56-0578072 (I.R.S. Employer Identification No.) 1000 Lowe's Blvd., Mooresville, NC (Address of principal executive offices) 28117 (Zip Code) Registrant's telephone number, including area code 704-758-1000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, $0.50 Par Value New York Stock Exchange (NYSE) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. x Yes o No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. o Yes x No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes o No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of \"large accelerated filer,\" \"accelerated filer,\" and \"smaller reporting company\" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer x Accelerated filer o Non-accelerated filer o Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No Smaller reporting company o As of July 31, 2015, the last business day of the Company's most recent second quarter, the aggregate market value of the registrant's common stock held by non-affiliates of the registrant was $64.3 billion based on the closing sale price as reported on the New York Stock Exchange. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. CLASS OUTSTANDING AT 3/24/2016 Common Stock, $0.50 par value 897,438,629 DOCUMENTS INCORPORATED BY REFERENCE Document Parts Into Which Incorporated Portions of the Proxy Statement for Lowe's 2016 Annual Meeting of Shareholders Part III LOWE'S COMPANIES, INC. - TABLE OF CONTENTS Page No. PART I Item 1. Item 1A. Item 1B. Item 2. Item 3. Item 4. Business Risk Factors Unresolved Staff Comments Properties Legal Proceedings Mine Safety Disclosures Executive Officers and Certain Significant Employees of the Registrant 4 9 14 14 14 15 16 PART II Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information 17 17 18 32 33 63 63 63 PART III Item 10. Item 11. Item 12. Item 13. Item 14. Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accountant Fees and Services 64 64 64 64 64 PART IV Item 15. Exhibits and Financial Statement Schedules 65 Signatures 73 Table of Contents Part I Item 1 - Business General Information Lowe's Companies, Inc. and subsidiaries (the Company or Lowe's) is a Fortune 50 company and the world's second largest home improvement retailer. As of January 29, 2016, Lowe's operated 1,857 home improvement and hardware stores, representing approximately 202 million square feet of retail selling space. Lowe's is comprised of 1,805 stores located across 50 U.S. states, including 80 Orchard Supply Hardware (Orchard) stores in California and Oregon, as well as 42 stores in Canada, and 10 stores in Mexico. Lowe's was incorporated in North Carolina in 1952 and has been publicly held since 1961. The Company's common stock is listed on the New York Stock Exchange - ticker symbol \"LOW\". See Item 6, \"Selected Financial Data\ACT 5140 - Accounting for Decision Makers Lowes Companies Assignment due 10-8-2016 Directions: Answer all the questions. Please use the Excel workbook below for your answers Be sure to show ho include your name at the top of the first page of your file. The assignment is due by 11:59 PM on October 8, 201 To do the best paper you should use information from various areas of the 10-k for Lowes as a basis for some o Discussion and Analysis) and Notes to the financial statements are a good place to start, but there are other ar valuable in doing your analysis. It is best to be familair with what is in the 10-k report before starting any analy Please run spell check and proofread your answers. Poorly written answers are not only hard to read, they loose t you a lower grade. Since this project will take some time to do, it is best that you begin this project as soon as p at yessman@nova.edu or ayessmancma@gmail.com. Good luck! Part 1 Assess Lowes Companies concerning liquidity, solvency, profitability, and stock performance as of January 29, 201 discussed in class and provide an analysis of the ratios calculated. It would also be helpful to compare Lowes's rati stock price information and outstanding common share information below. Part 2 In Tab 6 at the end: Vertical and Horizontal Analysis Perform a vertical and horizontal analysis of Lowes Companies income statements and balance sheets as of Janua notable trends or changes that you observe that may provide useful information concerning its financial condition feel necessary. You should write up your results in paragraph form. Tab 6 - (Vert-Horiz Analysis) contains full details of what is required. our answers Be sure to show how you did your calculations. Also, please be sure to by 11:59 PM on October 8, 2016. for Lowes as a basis for some of your answers. The MD&A (Management's to start, but there are other areas in the 10-k that can prove to be even more report before starting any analysis work. t only hard to read, they loose the meaning of what you are trying to say thus giving u begin this project as soon as possible. If you have any questions, please e-mail me rformance as of January 29, 2016. For each area, you should calculate the ratios we helpful to compare Lowes's ratios with Home Depot's ratios. I include historical s and balance sheets as of January 29, 2016. In performing this analysis, consider any oncerning its financial condition. Also use as many years' worth of statements as you You will see below 3 "green" tabs and 6 "red tabs". Green Tabs Represent the information you will need to compute the answers required in the re The Red tabs represent where you will place your answers. Each red tab requires 2 things: (1) Calculated Answers in Each Box (2) Explanations in the text b In each red tab you will need to fill in each box where a calcuclated amount is required. The text box found in each red tab area is for you to explain what your calculated answers in th represent. For instance, if a current ratio goes up then it shows the creditor that the company is has more and they are better short term risk. Using the accompanying financial statements (found in the green tabs), assess The Home Depot concerning liquidity, solvency, profitability, and stock performance. For each area, you should ca the ratios we discussed in class and provide a brief analysis of the ratios calculated. You do not perform vertical analysis for this assignment. Legend for Tabs Listed Below nswers required in the red tabs. Explanations in the text box area mount is required. calculated answers in the boxes he company is has more liquidity , assess The Home Depot each area, you should calculate s calculated. You do not need to Green Tabs - Information Required for Red Tab Answers 1. SP - Historical Stock Prices 2. IS - Income Statement 3. BS - Balance Sheet 4. CF - Statement of Cash Flows Red Tabs - You will supply your answers in these tabs There are 2 sets of answers required 1. In the Boxes you will put your calculations for the ratio required 2. In the text box you will write text about what your ratios mean to an outside investor, creditor, etc. 1. 2. 3. 4. 5. 6. Short-Term - Answers to your short term ratios Long-Term - Answers to your long term ratios Profitability - Answers to your profitability ratios DuPont Analysis - Answers to your DuPont Analysis Ratios Stock - Answers to your Stock Ratios Vert-Horiz Analysis - Answers to this type of analysis Remember, ratio answers in the boxes and written answers on what the ratios mean in the text box. Once you are done with your answers - email them to me to the following email address: yessman@nova.edu swers abs s for the ratio required what your ratios mean to an ratios atios y ratios alysis Ratios os nalysis en answers on what the r answers - email email address: Lowes Companies Inc 10-K Income Statement (Amounts in millions except per share data) Fiscal Year Ended Net Sales Cost of Sales Gross Margin Expenses: Selling, General and Administrative Depreciation Interest - Net Total Expenses Pre-Tax Earnings Income Tax Provision Net Earnings Basic EPS Diluted EPS Dividends Per Share 1/29/2016 1/30/2015 1/31/2014 2/1/2013 $ 59,074 38,504 20,570 $ 56,223 36,665 19,558 $ 53,417 34,941 18,476 $50,521 33,194 17,327 14,115 1,484 552 16,151 4,419 1,873 $ 2,546 13,281 1,485 516 15,282 4,276 1,578 $ 2,698 12,865 1,462 476 14,803 3,673 1,387 $ 2,286 12,244 1,523 423 14,190 3,137 1,178 $ 1,959 $2.73 $2.73 $1.07 $2.71 $2.71 $0.87 $2.14 $2.14 $0.70 $1.69 $1.69 $0.62 Lowes Companies Inc 10-K Balance Sheet (Amounts in millions) Fiscal Year Ended ASSETS Current assets: Cash and cash equivalents Short-term investments Merchandise inventories - net Other current assets Total current assets Property, less accumulated depreciation Long-term investments Deferred income taxes - net Other assets Total assets LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities: Short-term borrowings Current maturities of long-term debt Accounts payable Accrued compensation & employee benefits Deferred revenue Other current liabilities Total current liabilities Long-term debt, excluding current maturities Deferred income taxes - net Deferred revenue - extended protection plans Other liabilities Total liabilties Shareholders' equity: Common stock Capital in excess of par value Retained earnings Accumulated other comprehensive income (loss) Total shareholders' equity 1/29/2016 1/30/2015 1/31/2014 2/1/2013 $ 405 307 9,458 391 $ 10,561 $ 466 125 8,911 349 $ 9,851 $ 391 185 9,127 341 $ 10,044 $ 19,577 222 241 665 $ 31,266 20,034 354 133 1,349 $ 31,721 20,834 279 1,323 $ 32,480 21,477 271 1,134 $ 32,449 $ 43 1,061 5,633 820 1,078 1,857 $ 10,492 $ 552 5,124 773 979 1,920 $ 9,348 $ 386 49 5,008 785 892 1,756 $ 8,876 $ 11,545 729 846 $ 23,612 10,806 730 869 $ 21,753 10,086 39 730 896 $ 20,627 9,030 238 715 901 $ 18,592 $ 541 125 8,600 301 $ 9,567 47 4,657 670 824 1,510 $ 7,708 455 $ 480 $ 515 $ 555 26 7,593 9,591 11,355 13,224 (394) (103) (17) 52 7,654 9,968 11,853 13,857 Total liabilities and shareholders equity $ 31,266 $ 31,721 $ 32,480 $ 32,449 Lowes Companies Inc 10-K Statement of Cash Flows (Amounts in millions) Fiscal Year Ended Cash flows from operating activities: Net earnings 1/29/2016 1/30/2015 1/31/2014 2/1/2013 $ Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation and amortization Deferred income taxes Loss on property & other assets - net Loss on 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 $ Cash flows from investing activities: Purchases of investments Proceeds from sale / maturity of investments Capital expenditures Contributions to equity method investments - net Proceeds from sale of property & other long-term assets Acquisitions of business - net Other - net Net cash used in investing activities Cash flows from financing activities: Net change in short-term borrowings Net proceeds from issuance of long-term debt Repayment of long-term debt Proceeds from issuance of common stock under share-based payment plans Cash dividends paid 2,546 2,698 $ 2,286 $ 1,959 1,587 (68) 33 591 117 1,586 (124) 25 57 119 1,562 (162) 64 52 100 1,623 (140) 83 48 ### (582) (34) 524 70 170 83 127 188 (396) (5) 291 319 (244) (87) 303 117 4,111 $ 3,762 (759) 709 (940) (173) 75 (203) 5 (1,444) 1,837 (1,211) (219) 130 4 4,784 (934) 884 (1,197) (125) 57 (28) $ $ $ 4,929 (820) 805 (880) (241) 52 ### (4) $ (1,343) $ (1,088) $ (1,286) $ (903) 43 1,718 (552) 125 (957) (386) 1,239 (48) 137 (822) 386 985 (47) 165 (733) 1,984 (591) 349 (704) Repurchase of common stock Other - net Net cash used in financing activities (3,925) 55 $ Effect of exchange rates on cash Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year (3,905) 24 (3,710) (15) (4,393) 22 (3,493) $ (3,761) $ (2,969) $(3,333) (9) (5) (6) 1 (61) 466 75 391 (150) 541 (473) 1,014 Cash and cash equivalents at end of year