Part I: Financial Comparison
To begin this assignment, download the consolidated financial statements for Lowes and Home Depot, two competing large chain construction supply stores.
After you review these statements, complete the following steps:
- Select 7-10 financial ratios or components of a financial statement that you think will help you to describe the financial health of Lowes relative to that of Home Depot.
- Calculate these measures for both organizations and describe what the trend of these financial ratios may indicate. Write a brief (300 word) overview of the Lowes financial standing. In your overview, explain why you have selected the metrics you have and what they reveal about the organization
Part II: Evaluating New Venture
Now, imagine that Lowes is considering adding a new store near the Columbia University campus in New York City. Download the following document containing partial information about the assumptions related to opening a new store.
Your task is to decide if Lowes should move forward with this opportunity. Author a brief (300) word overview of the new store. In your overview, be sure to define:
- What assumptions you have made about the investment and where you have gotten your data.
- Include a calculation of the NPV and IRR of the investment opportunity. You will need to project financial statements for Lowes.
- Based on your financial analysis in Part I, explain why you believe Lowes should or should not move forward with the investment. What other strategic and operational factors should be considered in addition to the financial analysis?
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