provide responses to each discussion post attached by following the guidelines outline in each document. respond as if you are speaking to the person directly. responses should be separate for each document and each should be 1-2 paragraphs

Read the below and respond as if you were speaking to the person directly in your response - Use your professional experience and understanding of the information presented in this course to respond to your fellow learners. What suggestions do you have as they consider a breakeven analysis for Lowe's Mckennon - u2d2 Lowe's has several factors in determine whether to open new stores. They need to identify their fixed and variable costs that will occur. Based on previous sales projections and inventory. Lowe's needs to determine if they have another to cover the overhead costs. The Break-even analysis is one way to determine that. I would also use current ratio to determine whether Lowe's can meet their short term obligations. I would use gross profit rate to see how sales in the area are doing. Since most of the stores are within 15 miles radius to see if the stores are managing cost of goods sold. Read the below and respond as if you were speaking to the person directly in your response - Use your professional experience and understanding of the information presented in this course to respond to your fellow learners. What suggestions do you have as they consider a breakeven analysis for Lowe's Breakeven analysis is used to determine at what point a business will cover it's expenses and begin to turn a profit. At the breakeven point, no profit or loss will occur. Once the breakeven point has been reached, any quantity sold past the breakeven quantity will yield a profit. In regards to Lowe's and their expansion plans, it is imperative that management runs a breakeven analysis to determine at what costs and quantities will yield profits. When dealing with a complete brand new store expansion, Lowe's must be cognizant of all costs associated with the buildout and at what point the store will begin to make a profit - how much sales will be needed and at what price point items should be priced at in order to create the fastest breakeven point. With this information, Lowe's should be able to make an educated decision on whether an expansion project would be a wise decision financially for the company as a whole. Breakeven analysis is not indicative of actual sales or quantities - it is merely an analysis to help management make educated decisions. Given Lowe's current financial situation and their desire to in essence, re-invent themselves and their current re-setting strategy, it may be wise to do some breakeven analysis to determine if a buildout is a financially feasible decision. While waiting for the results of the analysis, Lowe's can see how their re-set strategy is working in their current stores - is sales and foot traffic increasing? Has there been any feedback regarding the new layouts? Has the new focus on transforming the company from a home improvement retailer to a home improvement company been noticed in increase in sales or traffic in stores/online? Before making large financial decisions, it may be important to ensure that strategies in current stores are improving and the mission and focus of the company is being taken seriously. Guidelines Respond to the below as if you were speaking to the person directly. Assume you are a member of the Phonetronix, Inc. leadership team for whom the breakeven data was prepared. What is your recommendation for the company? What additional questions do you have, or what additional information would you like to see prior to making a decision? Patrick: One of the first things I noticed about the ratios for Lowes was that despite steadily increasing performance ratios, they are still consistently lower than their biggest competitor, Home Depot. By looking at the DuPont analysis, we can see that the equity multiplier is significantly higher for Lowes in addition to asset turnover and profit margin being lower which makes Home Depot an overall more financially sound company when it comes to overall Performance. I believe that when you consider the customers, Home Depot has an overall more inviting then store plus where I live you will see a lot more advertising by Home Depot when compared to Lowes. This would also affect asset management as Lowes does not sell through its' inventory as fast as Home Depot and this is especially evident when comparing the most recent years in our analysis although in all fairness we can't truly compare them because the Home Depot info is for a different year although it is safe to say Home Depot is still likely to be outperforming Lowes. As far as the liquidity ratios are concerned, Lowes at one point was doing better than Home Depot at paying off its' financial obligations but has taken a turn for the worst in the most recent year. This is due mainly to large increases in inventory and current liabilities. This would in turn have a bad effect on the debt ratios which again are not as good as Home Depots'. Finally, when you analyze the break-even analysis you can see that despite variable expenses declining, the fixed expenses increased which caused the company to apparently raise prices significantly. This may make the break-even items lower than recent years and seem good but that is not a good thing in this case due to the increased prices. Overall it is very clear that Lowes has their work cut out for them and I wouldn't be so confident in their expansion plans if it were not for the fact that they try harder to cater to the non-exper Guidelines Respond to the below as if you were speaking to the person directly. Assume you are a member of the Phonetronix, Inc. leadership team for whom the breakeven data was prepared. What is your recommendation for the company? What additional questions do you have, or what additional information would you like to see prior to making a decision? Erin CVP analysis is useful in many different situations and can help guide business decisions. As Horngren, et al. describes, CVP analysis is the study of the effects of output volume on revenue (sales), expenses (costs), and net income (net profit). This analysis is a crucial tool in decision making when managing changes in volume of goods or services produced - especially when seeing decreases in demand, it's important that businesses manage these changes and ensure that they are covering their costs and making the wisest financial and business decisions. I have yet to use a CVP analysis in my professional life but I kind of see similarities to this analysis with a personal budget. While I was doing the assignments, I was drawing similarities to creating my personal budget - this may not be exactly how a CVP analysis is to be tied to a personal situation but I was very drawn to this example. Net sales is equivalent to my income which can vary based on the hours I put in at work. Variable expenses are equivalent to my personal/social outing expenses and fixed costs are expenses that do not vary each month like rent, cell phone, and car insurance payments. The remainder is what is available for me to save or invest as a business is able to call profit. Edit* After more thought, CVP analysis does not truly relate to a personal budget unless I am able to use the same number of hours for both hours worked and personal/social outings as that variable is the same in CVP analysis. However, I wanted to leave this in my post as I still feel I can relate to it to my life