Study_questions_for_Value_Line_case

Study_questions_for_Value_Line_case - Look specifically at...

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Study questions for Value Line case 1. What do the financial ratios in case Exhibit 7 tell you about the operating performance of Home Depot? What additional information do the different ratios provide? Complete and compare a similar analysis for Lowe’s. 2. How sensitive is return on capital to the forecast assumptions in case Exhibit 8? What independent changes in Carrie Galeotafiore’s estimates are required to drive the 2002 return-on-capital estimate below Home Depot’s cost-of-capital estimate of 12.3 percent?
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Unformatted text preview: Look specifically at gross margin, cash operating expenses, receivable turnover, inventory turnover, and P&E turnover. What effect does sales growth have on return on capital? Explain your findings. 3. Do you agree with Galeotafiores forecast for Home Depot? How would you adjust it? 4. How would your forecast assumptions differ for Lowes? Complete and recommend a five-year Lowes forecast to Galeotafiore....
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This note was uploaded on 03/21/2012 for the course BLAW 1000 taught by Professor Stuff during the Spring '12 term at LSU.

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