Discussing The Financial State Of Lowes

In this case study I will be discussing the financial state of Lowes. In class we have learned a lot about the different things that can impact a business and ultimately have an impact on the shareholders and the stockholders. Some of those things include how the company does financially at the end of the year. For example if at the end of the year if a business does well they can choose to spend the cash they have at the end of the year in different ways. They can choose to use the money to expand their company. Expansion can generate more profit for a company because it adds more people who can purchase merchandise from the company. In that case having the extra people who can purchase the merchandise will give the business possibly more

Some of the major differences I see between the two companies is total liabilities and net profit. Total liabilities for Home Depot is more than that of Lowes by $10,000 or more every year from 2012 to 2016. Which is a 17% difference. Normally one might assume that this is a bad thing, but there could be a good reason why their total liabilities is much greater than Lowes. One reason might be that Home Depot is borrowing more money to upgrade their business where has Lowes isn’t doing that. A reason why I believe that is the case is due to Home Depot having a greater net profit than Lowes. Home Depot has a greater net profit than Lowes by $3,000 or more from 2012 to 2016. The difference between the two percentages wise is also 17%. Although I do not know the exact liabilities that Home Depot has, based off the numbers I just gave I can conclude that they correlate with each

There are a number of ways that Lowes can generate more money. One way they can generate more money is by issuing more stock for people to purchase. That can give them a decent amount of money depending on how many they issue. Another way they can generate more money is by taking out loans that they can pay back at a later time, hopefully by the time it comes to pay the money back. The money they originally borrowed will have already paid off. The pros to generating more money and investing it back into the business is that you can upgrade the quality of your products which in turn can generate more customers once they see that your product is a high quality product. You could also use the money to add different features to your business. For example Lowes could add a machine to the store that allows customers to build their own projects from scratch and it shows the customer everything they need from Lowes to build it. A con of this idea would be if it doesn’t generate enough new customers to pay itself