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Business and Finance

Lowes Corporation Analysis

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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