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Financial Research Report: Lowe’s Companies, Inc Kathy McGhee FIN 534 March 12, 2011 Strayer University
markets. and earnings per share. its operations. . and lines of business. Project these trends for three years. The report is due in Week 10. current and long term liabilities. and it needs to cover the following topics: Company Overview: Conduct research and describe the company. sales revenues. Collect financial statements for the past three years. EBIT.Financial Research Report Review of Financial Research Report: This assignment is an analysis of a US publicly-traded company. owner’s equity. net income. Research the Standard & Poor’s Stock Market Index (S&P 500) for the past five years. in needs to be at least 5 pages. locations. Ratio analysis: Perform trend and ratio analysis on current and fixed assets. Chart the price movement in the company’s common stock against the S&P price movement. References: Use at least five references and follow APA format when preparing the report. Stock price analysis: Research the company’s common stock price for the past five years. fiscal or calendar. State and support your opinion on the company’s common stock as an investment opportunity. its common stock could be a prospective investment.
S. work boots.2 billion. accounting for the majority of Lowe’s business. Lowe's evolved from a regional hardware store operator into a nationwide chain of home improvement superstores bent on international expansion. James Lowe. Lowe’s had its first billion-dollar sales year. concentrated on selling only hardware. According to the Lowe’s Home Improvement website (2010). Carl Buchan later bought-out his brother-in-law and partner. U. Carl Buchan.S. “The #2 US home improvement chain (after The Home Depot). (para 4). 2010).700 superstores in 50 states and more than 15 locations in Canada and Mexico. Lowe's established a lasting reputation for low prices. No longer a low-profile company. and began trading on the New York Stock Exchange in 1979 (NYSE: LOW). Inc was founded in 1946 in Mooresville. snuff to wash tubs. appliances and hard-to-find building materials. Lowe’s carries product such as lumber. envisioned creating a chain of hardware stores. plumbing . part owner of the North Wilkesboro Hardware Company. Its stores sell some 40. Lowe's has about 1. With fiscal year 2009 sales of $47. At the time. The company went public in 1961. paint. North Carolina. 2011.46 (Investor Relations. By eliminating wholesalers and dealing directly with manufacturers. earning a record profit of $25 million. para 1). Sales grew over time and additional Lowe’s stores opened in neighboring towns throughout western North Carolina. and foreseeing the post-World War II building boom. Lowe's Companies serves approximately 15 million customers a week and their current stock price is $26. as well as an ecommerce site” (Lowe’s Companies. small town hardware store selling everything from overalls. housing starts soared and professional builders became Lowe's loyal customers. and even horse collars. The Lowe's story began in North Carolina when H.000 products for do-it-yourselfers and professionals for home improvement and repair projects. Inc. In 1982. During this time.Financial Research Report Lowe’s Companies. Lowe’s is also the seventh largest retailer in the U. Lowe’s was a typical.
For the fiscal year ended January 28.1% for the fourth quarter and increased 1. tools.195 The ratios. Comparable store sales increased 1. up from $10.2 billion in the fourth quarter of 2009.055 48. “Lowe’s Reports Fourth Quarter Sales and Earnings Results” (2011).587 18.112 48.21 from $0. EPS and EBIT for past three years are shown below: .783 Jan-09 32.7% to $2 billion and diluted earnings per share increased 17. and furniture.3% for fiscal 2010 (para 1-2). as well as appliances.005 13.Financial Research Report and electrical supplies.069 47. For the fiscal year ended January 28.631 18. The Lowe’s Companies. 2011. and gardening products. sales increased 3. lighting. According to in millions $ Total Assets Total Liability Stockholder's Equity Revenue Gross Profit Total Net Income Jan-11 33. a 39% increase from the same period a year ago. 2010.230 16. net earnings increased 12.5 billion.8 billion.699 15.14 in the fourth quarter of 2009.42.1% to $10. Lowe’s reported net earnings of $285 million for the quarter ended January 28.152 2.220 16.936 19.4 percent to $1. Diluted earnings per share increased 50% to $0. 2011. Sales for the quarter increased 3. Inc is ranked number 42 among other Fortune 500 companies.4% to $48. Below are some figures from Lowe’s Balance Sheets and Income Statements from 2009. 2011. and 2011.010 Jan-10 33.501 2. Lowe's is the second-largest US home appliance retailer after Sears.686 14.815 17.463 1.
153 0.387 5. The data was then compared with each other.055 0.750.000 01-Feb-08 1.179 0.031 0.036 0.185 0.151 3.Financial Research Report 30-Jan-09 Current Ratio Quick Ratio Cash Ratio Debt-to-Equity Ratio EPS EBIT 1.000 Data from the past five years has been collected from Lowe’s Company and the S&P 500 Index.216 0.120 0.138 0. The pricing comparison is shown in the chart below: .271 0.207 4.152.000 02-Feb-07 1.804.130 0.159 0.
It is ranked 47th in the Fortune 500 companies list. The customers can buy the goods online with the help of their website.4 million US dollars. . If however. the subsidiary company would not have been able to cover up for the parent company. Still it has underperformed the S&P index. almost all the major companies in the world were affected. As mentioned earlier it has the company has operating stores in both. Even the subsidiary in Canada was affected deeply. buying signals are there but not too strong.Financial Research Report The charting trend shows that it has underperformed in comparison to the S&P index. The operation of these subsidiaries began in December 2007. according to the charting pattern it has currently. The organization maintains the same culture elsewhere. anyone is holding the stock. The revenue stream dropped down significantly and they faced a huge loss. then we would recommend holding for a short term basis. United States and Canada. The subsidiary we are taken in concern is LOWE Canada. We therefore form a opinion that in the economic meltdown of 2008. The major reason is that its business directly depends on the real estate industry which was hit most in the crisis. LOWE is not a low profile company. In the subprime crisis on the real estate industry. LOWE Canada operates in the same way as its parent company. However. Each store averages over 20. In total it has 15 stores in Canada. The company is based in Toronto and Ontario.
Retrieved March 5.Financial Research Report References: Lessons from the recession: a management and communication perspective by Sarah Sanderson King. 2004 Investment: Capital theory and investment behavior by Dale Weldeau Jorgenson . Retrieved March 5.cfm Lowe’s Companies.shareholder.com Investor Relations (2010). 2011.com/lowes/ReleaseDetail. from http://investor. from http://investor.hoovers. Donald P.finance.com/history/ . Financial ratios: analysis and predictionbyMeir Tamar. from http://www. from http://media. (2011). 2008. 2011.shareholder.com/lowes/index. Retrieved March 5. 1996 Financial ratios: how to use financial ratios to maximize value and successs by Richard Bull. Cushman.lowes.com/company/Lowes_Companies_Inc/rfstif-1-1njdap. 1978 Yahoo. Retrieved March 5.Business & Economics.cfm?ReleaseID=551811&openNews =true Our Heritage (2010).html Lowe's reports fourth quarter sales and earnings results (2011). Inc. 2011. 2011.
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