Compare Lowes' and Home Depot's Financials

Managerial Accounting (2nd Edition)

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Unformatted text preview: I compared financial statements for two big-box home-improvement retailers, Lowes and Home Depot. Both companies used the indirect method to analyze their cash flow. Lowes cash flow was increased by net borrowing, additions to assets and funds from operations. Home Depots cash flow was increased by adjustments to gross income, investments and operations. Lowes cash provided by operations was decreased by a decline in inventory and accounts payable. Home Depots cash was decreased by receivables, inventories and accounts payable. Overall, both companies experienced a cash decrease from operating activities. During the year, investing activities increased Lowes cash, while Home Depots cash was decreased over the same time period. Stock options were the major source of Lowes cash related to investing. Home Depots major use of cash for investing was other proceeds from the sale or issue of stock. Lowes financing activities increased cash during the year. Home Depots sale or issue of stock....
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