The table below contains some of the Industry Benchmark Ratios for the Home Improvement Industry. Using the ratios that you calculated during weeks 4 and 5 prepare an analysis of how both Lowe?s and Home Depot compare to the Industry Benchmarks listed below. Minimum of three paragraphs. Be sure to explain fully what each benchmark and ratio indicate about the financial health of both companies.

See attachment for the tables of ratios.

BSAD 501 Week 6 - Exercise 2 Please be sure to put your name on all assignments. Required: Answer the following questions based on your examination of the Lowes and Home Depot 10-Ks. You can find the 10-Ks at the SEC's website. 1. The table below contains some of the Industry Benchmark Ratios for the Home Improvement Industry. Using the ratios that you calculated during weeks 4 and 5 prepare an analysis of how both Lowe's and Home Depot compare to the Industry Benchmarks listed below. Minimum of three paragraphs. Be sure to explain fully what each benchmark and ratio indicate about the financial health of both companies. 10-K Analysis Current Ratio Quick Ratio Gross Margin Net Margin Return on Equity Return on Assets Lowes Net Income Sales COGS Total Assets Sharholers Equity Current Assets Current Liabilities Quick Assets Fixed Assets Account Receivables Inventory Ratios Net Profit Margin Total Assets Turnvoer Return on Assets Equity Multiplier Return on Equity 2698 56223 36665 31827 9968 10080 9348 821 20034 230 8911 Lowes 4.80% 1.77 8.48% 3.19 27.07% Industry Benchmark 1.56 0.22 34.81% 6.94% 47.32% 13.72% Home Depot 6345 83176 54222 39946 9322 15302 11269 3207 22720 1484 11079 Home Depot 7.63% 2.08 15.88% 4.29 68.06% Fixed Assets turnvoer Account Receivbale T/O 2.81 3.66 244.45 56.05 Inventory T/O Current Ratio Acid Test Ratio 4.11 4.89 1.08 0.09 1.36 0.28 BSAD 501 Week 6 - Exercise 2 Please be sure to put your name on all assignments. Required: Answer the following questions based on your examination of the Lowes and Home Depot 10-Ks. You can find the 10-Ks at the SEC's website. 1. The table below contains some of the Industry Benchmark Ratios for the Home Improvement Industry. Using the ratios that you calculated during weeks 4 and 5 prepare an analysis of how both Lowe's and Home Depot compare to the Industry Benchmarks listed below.Minimum of three paragraphs. Be sure to explain fully what each benchmark and ratio indicate about the financial health of both companies. 10-K Analysis Current Ratio Quick Ratio Gross Margin Net Margin Return on Equity Return on Assets Lowes Net Income Sales COGS Total Assets Sharholers Equity Current Assets Current Liabilities Quick Assets Fixed Assets Account Receivables Inventory Ratios Net Profit Margin Total Assets Turnvoer Return on Assets Equity Multiplier Return on Equity 2698 56223 36665 31827 9968 10080 9348 821 20034 230 8911 Lowes 4.80% 1.77 8.48% 3.19 27.07% Industry Benchmark 1.56 0.22 34.81% 6.94% 47.32% 13.72% Home Depot 6345 83176 54222 39946 9322 15302 11269 3207 22720 1484 11079 Home Depot 7.63% 2.08 15.88% 4.29 68.06% Fixed Assets turnvoer Account Receivbale T/O 2.81 3.66 244.45 56.05 Inventory T/O Current Ratio Acid Test Ratio 4.11 4.89 ANSWER 1.08 0.09 1.36 0.28 The comparative data of the companies vis--vis the industry benchmark ratios is given below 10-K Analysis Current Ratio Quick Ratio Gross Margin Net Margin Return on Equity Return on Assets Industry Benchmark 1.56 0.22 34.81% 6.94% 47.32% 13.72% Lowes 1.08 0.09 34.79% 4.80% 27.07% 8.48% Home Depot 1.36 0.28 34.81% 7.63% 68.06% 15.88% A detailed analysis follows. The gross profit margin expresses the percentage of revenue left over after accounting for the cost of goods sold.As per the data above, we observe that the gross margin ratios of both companies hover around the industry benchmark. In fact, the margin of Home Depot is exactly equal to the industry benchmark. This is a positive sign and tells us that neither company grossly exceeds their cost of goods sold. However, when we study the net profit margins of the companies, it is observed that the margin of Lowes is much lesser than the industry benchmark while that of Home Depot exceeds the benchmark. Net profit margin expresses the percentage of revenues left over after deducting all operating costs. Thus, while Lowes has been able to maintain the proportion of cost of goods sold to revenues, it has not been able to maintain the level of other costs such as administrative and selling costs. The converse has happened for Home Depot. It has been able to control its other costs much better than the industry benchmark. Current Ratio is the ratio of current assets to current liabilities. It represents the company's abilities to pay its immediate liabilities. The industry benchmark is 1.56 and both Lowes and Home Depot have not been able to maintain their current assets sufficiently to meet current debts indicating lower liquidity. Quick ratio is an even more precise measure of liquidity. It depicts the cash and cash quivalents maintained by a company relative to its current liabilities. The industry benchmark is 0.22. Home Depot has maintained a higher quick ratio which implies that it has more cash and cash equivalents than the industry benchmark to cover its quick liabilities. Thus its liquidity position is stronger. Converse is true for Lowes. Its quick ratio is less than half of the industry benchmark indicating that it has not maintained enough amounts of cash and equivalents. Return on Equity is a measure of the amount of profits generated per dollar of equity. In this case the industry benchmark is 47.32%. While Lowes is lagging behind in meeting this measure, Home Depot has surged ahead. Thus the Net margin is low for the Shareholder's equity in case of Lowes while the returns obtained by shareholders of Home Depot are high as compared to industry benchmark. The same is true for return on assets. Return on assets is measured by dividing the net income by total assets. The return on assets is low in case of Lowes while the same is higher than the industry benchmark in case of Home Depot. Thus overall, Hoe Depot is providing higher returns to shareholders and also per dollar of asset invested as compared to Lowes