Home Depot and Lowe's operate national chains of home improvement stores that sell a wide assortment of building materials and home improvement, lawn, and garden products, such as lumber, paint, wall coverings, lawn mowers, plumbing, and electrical supplies. Home Depot operates approximately 1,707 stores, while Lowe's operates approximately 952 stores. The following operating data (in millions) were adapted from the 2004 SEC 10-K filings of Home Depot and Lowe's:

1. Prepare common-sized income statements for Home Depot and Lowe's.
2. Compute the average sales per store for Home Depot and Lowe's. Round to the thousands.
3. Analyze and comment on your results in (1) and (2).
4. Broker recommendations are reported on Yahoo.com's financial Web site. The recommendations are ranked as follows:
Strong Buy .......1
Buy ..........2
Hold .........3
Sell ............4
Strong Sell .......5
Based upon your answer to (3), would you expect the average broker recommendation for
Home Depot to be higher (less favorable) or lower (more favorable) than for Lowe's? Compare your assessment with the average broker recommendation on Yahoo.com's financial Web site (finance.yahoo.com/). To find the broker recommendation, enter the stock symbols for Home Depot (HD) and Lowe's (LOW) and click on"research."

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Home Depot Net sales Cost of sales Gross profit Operating expenses Operating income Interest expense Other income Income before taxes Income taxes Net income $64,816 44,236 $20,580 13,734 6,846 62 59 Lowe's $30,838 21,231 9,607 6,429 $3,178 180 15 3,013 1,136 S 1,877 6,843 2,539 4,304 5