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Interpreting Financial Summary

In: Business and Management

Submitted By rjb1224
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Interpreting Financial Summary
FIN/571 Corporate Finance
March 9, 2015
University of Phoenix

Lowes was founded in 1946 and has grown from a small hardware store in North Carolina to the second largest home improvement retailer worldwide and the 8th largest retailer in the United States. Lowe’s was a typical, small town hardware store selling everything from overalls and bicycles to wash tubs, work boots and even horse collars. Carl Buchan later purchased the Company from his brother-in-law and partner, James Lowe. Foreseeing the post-World War II building boom, Buchan concentrated on selling only hardware, appliances and building materials (Lowes, N.D.). By eliminating wholesalers and dealing directly with manufacturers, Lowe's established a lasting reputation for low prices. The sales grew over time, and additional Lowe's stores opened in neighboring towns throughout Western North Carolina. The company went public in 1961 and began trading on the New York Stock Exchange. During this time, U.S. housing starts soared and professional builders became Lowe's loyal customers, accounting for the majority of Lowe’s business. In 1982, Lowe’s had our first billion-dollar sales year, earning a record profit of $25 million (Lowes, N.D.). Lowes continues to grow and faces its challenges in the economy. We will be going through the past three years and compare historical data from 2012 to 2014. We will use five different ratios to analyze the collected data. The ratios are Debt, Current, Cash flow to debt, Debt Equity and Total asset turnover ratio.
Interpreting Financial Summary
Debt ratio
The debt ratio is the ratio of total debt to total assets, expressed in percentage, and can be understood as the amount of a company’s assets that are financed by debt (Investopedia, N.D.). In the past three years, Lowes has shown a decrease with it being 1.57 in 2014. As the...

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