Required:

a. Compute the following ratios for the companies 2017 fiscal years (years ending in January 2018): (1) Current ratio.

(2) Average days to sell inventory. (Use average inventory.)

(3) Debt-to-assets ratio.

(4) Return on investment. (Use average assets and use earnings from continuing operations rather than net earnings.)

(5) Gross margin percentage.

(6) Asset turnover. (Use average assets.)

(7) Return on sales. (Use earnings from continuing operations rather than net earnings.)

(8) Plant assets to long-term debt ratio.

b. Which company appears to be more profitable? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion.

c. Which company appears to have the higher level of financial risk? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion.

d. Which company appears to be charging higher prices for its goods? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion.

e. Which company appears to be the more efficient at using its assets? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion.

LOWES COMPANIES INC. Selected Financial Information (amounts in millions except per share data) Total current assets Merchandise inventory Property and equipment, net of depreciation Total assets Total current liabilities Total long-term liabilities Total liabilities Total stockholders' equity Revenues Cost of goods sold Gross profit Operating income Earnings from continuing operations before income taxes Income tax expense Net earnings Basic earnings per share January 24, 2018 $12,000 10,458 19,949 34,408 11,974 16,000 27,974 6,434 65,017 42,553 22,464 5,846 5,201 2,108 3,093 $ 3.48 January 25, 2017 $10,561 9,458 19,577 31,266 10,492 9,120 23,612 7,654 59,074 38,504 20,570 4,971 4,419 1,873 2,546 $ 2.73 HOME DEPOT INC. Selected Financial Information (amounts in millions, except per share amounts) Total current assets Merchandise inventory Property and equipment, net of depreciation Total assets Total current liabilities Total long-term liabilities Total liabilities Total shareholders' equity Revenue Cost of goods sold Gross profit Operating income Earnings from continuing operations before income tax expense Income tax expense Net earnings Basic earnings per share January 28, 2018 $18,933 12,748 22,075 44,529 16,194 26.881 43,075 1,454 100,904 66,548 34,356 14,681 13,698 5,068 8,630 $ 7.33 January 29, 2017 $17,724 12,549 21,914 42,966 14,133 24,500 38,633 4,333 94,595 62,282 32,313 13,427 12,491 4,534 7,957 $ 6.47