Question
Two very close publicly traded competitive companies are Home Depot and Lowes. Home Depot stock is currently up 11% for the year while Lowes is
Two very close publicly traded competitive companies are Home Depot and Lowes. Home Depot stock is currently up 11% for the year while Lowes is up 3%. Using the tables below, why do you think this has occurred?
Home Depot
Lowes
Price/Earnings
23.19
36.31
Price/Book
151.61
33.7
Profit Margin
10.18%
3.52%
Return on Assets
20.48%
9.66%
Return on Equity
546.52%
60.02%
Previous questions is in BOLD and underlined
Looking now at the two company's statement of cash flows, would your answer to the previous question change? Why or why not?
Home Depot
Period Ending
2/3/2019
1/28/2018
1/29/2017
Net Income
11,121,000
8,630,000
7,957,000
Operating Activities, Cash Flows Provided By or Used In
Depreciation
2,152,000
2,062,000
1,973,000
Adjustments To Net Income
426,000
693,000
271,000
Changes In Accounts Receivables
33,000
139,000
-138,000
Changes In Liabilities
849,000
572,000
428,000
Changes In Inventories
-1,244,000
-84,000
-769,000
Changes In Other Operating Activities
-257,000
-10,000
-48,000
Total Cash Flow From Operating Activities
13,038,000
12,031,000
9,783,000
Investing Activities, Cash Flows Provided By or Used In
Capital Expenditure
-2,442,000
-1,897,000
-1,621,000
Investments
-
-
-
Other Cash flows from Investing Activities
14,000
-4,000
-4,000
Total Cash Flows From Investing Activities
-2,416,000
-2,228,000
-1,583,000
Financing Activities, Cash Flows Provided By or Used In
Dividends Paid
-4,704,000
-4,212,000
-3,404,000
Sale Purchase of Stock
-
-
-
Net Borrowings
2,037,000
3,298,000
2,274,000
Other Cash Flows from Financing Activities
-26,000
-211,000
-78,000
Total Cash Flows From Financing Activities
-12,420,000
-8,870,000
-7,870,000
Effect Of Exchange Rate Changes
-19,000
124,000
-8,000
Change In Cash and Cash Equivalents
-1,817,000
1,057,000
322,000
Lowes
Period Ending
2/1/2019
2/2/2018
2/3/2017
Net Income
2,314,000
3,447,000
3,093,000
Operating Activities, Cash Flows Provided By or Used In
Depreciation
1,454,000
1,540,000
1,590,000
Adjustments To Net Income
1,667,000
574,000
563,000
Changes In Accounts Receivables
-
-
-
Changes In Liabilities
1,720,000
-92,000
653,000
Changes In Inventories
-1,289,000
-791,000
-178,000
Changes In Other Operating Activities
327,000
387,000
-104,000
Total Cash Flow From Operating Activities
6,193,000
5,065,000
5,617,000
Investing Activities, Cash Flows Provided By or Used In
Capital Expenditure
-1,174,000
-1,123,000
-1,167,000
Investments
20,000
133,000
62,000
Other Cash flows from Investing Activities
-2,000
13,000
63,000
Total Cash Flows From Investing Activities
-1,080,000
-1,441,000
-3,361,000
Financing Activities, Cash Flows Provided By or Used In
Dividends Paid
-1,455,000
-1,288,000
-1,121,000
Sale Purchase of Stock
-
-
-
Net Borrowings
-741,000
744,000
2,560,000
Other Cash Flows from Financing Activities
-5,000
-10,000
-75,000
Total Cash Flows From Financing Activities
-5,124,000
-3,607,000
-2,092,000
Effect Of Exchange Rate Changes
-12,000
13,000
-11,000
Change In Cash and Cash Equivalents
-77,000
30,000
153,000
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Practical Financial Management
Authors: William R. Lasher
7th edition
128560721X, 9781133593669, 1133593682, 9781285607214, 978-1133593683
