Refer to the financial statements of The Home Depot in Appendix A and Lowes in Appendix B

Question:

Refer to the of The Home Depot in Appendix A and Lowe’s in Appendix B at the end of this book, or download the annual reports from the Cases section in the Connect library.
Required:
1. What method of depreciation does Lowe’s use?
2. What is Lowe’s fixed ratio for the year ended January 31, 2014? Compare this ratio to that of The Home Depot for the same period and describe what it implies about the operations of the two companies.
3. Lowe’s estimated useful life of buildings is shorter than that estimated by The Home Depot . How will this affect the fixed ratios of the two companies?
4. What amount of Depreciation Expense was reported on Lowe’s income statement for the year ended ended January 31, 2014? What percentage of net sales is it? Compare this percentage to that of The Home Depot for the same period and describe what this implies about the two companies’ operations. Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.