It started its company in North Carolina in 1953. It has been publically listed since 1961. It is basically an American company that is involved in the business of home improvements and appliance stores. It is operating its chains in America, Canada, and Mexico. It is the second number in the race of hardware chains in America. The company hires independent contractors to install different products, such as flooring, building materials, and other appliances. The company also encourages community improvement projects. It funds the different educational institutes and projects.
It funds almost 439 million for such projects. It is also the basic agenda of a company to sell private brands by using their products. Lowes Corporation has more than 7500 vendors all over the world. It outsources many of its products from all these vendors.it is the most dominant company in the US market as it earns 92% of sales. The number of employees, as recorded on February 2, 2018, is approx. Two hundred thousand full-time and the number of part-time employees is more than 100,000. To some extent, the company is seasonal. If we view its annual reports, we will see that the company is earning more business during the months of May, June, and July. However, its sales tend to decrease in November, December, and January. The best thing about the company is that it has its own risk management. It highlights the basic risk factors that can cause any kind of loss to the company. The company is trying to enhance its Omni-channels, adding more value to its earnings. It is not necessary through which channel a customer approach. The company will give him complete information before purchasing anything from the products with exact facts. The company’s annual report is available at the official site SEC. Customers can check it and seek guidance.
| year ended 31 December | 2017 | 2016 | 2015 |
| revenues | 13,735 | 13105 | 13415 |
| income before tax | 1582 | 244 | |
| income from continued operation | 1412 | 716 | 287 |
| gross income | 1412 | 716 | 287 |
| NCI | -248 | -62 | -27 |
| net income | 1164 | 654 | 260 |
Financial Statements Of The Company: Financial Position Of the Company:
| investments | 52226 | 50711 | 49400 |
| total assets | 79586 | 76594 | 76006 |
| debt (parent) | 1776 | 1775 | 1679 |
| debt( subsidiary) | 9757 | 9003 | 8881 |
| shareholder equity | 19204 | 18163 | 17561 |
| dividend | 0.25 | 0.25 | 0.25 |
| book value | 57.83 | 53.96 | 51.67 |
| shares outstanding | 332.09 | 336.63 | 339.9 |
Return On Assets:
It is the profit percentage of a company. It is actually the measurement of the company’s income over assets.
ROA= Net income/net assets
From the above-mentioned financial statements, the return on assets for 2017 is,
= net income/ net asset
= 1164/79586
=0.01
Profit Margin:
It is the calculation of the revenues of a company over a specified period of time.
NP = net profit before tax/sales * 100
= 1582/13735 * 100
= 11.51
Return On Equity:
It is a technique to measure assets on gross value rather than on NBV. It depends on three main things: profit margin, asset turnover, and financial leverage.
ROE= [EBIT/sales * sales/TA –IE/TA] * TA/Book equity * (1-TAX)
= [1110/15784 * 15784/35291 – 447/35291] * 35291/6376*(1-447)
= 0.2050
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