Lowes and Home Depot Report the Following Information in Their

question 88

Essay

Lowes and Home Depot report the following information in their 2010 annual financial statements ($ in millions):
$\begin{array}{lrr}\text { Lowes } & \underline{\mathbf{2 0 1 0}} & \underline{\mathbf{2 0 0 9}} \\\text { Sales } & \$ 47,220 & \$ 48,230 \\\text { Net income } & 1,783 & 2,195 \\\text { Operating cash flows } & 4,054 & 4,122 \\\text { Total assets } & 33,005 & 32,625\end{array}$

$\begin{array}{lrr}\text { Home Depot } & \underline{\mathbf{2 0 1 0}} & \underline{\mathbf{2 0 0 9}} \\\text { Sales } & \$ 66,176 & \$ 71,288 \\\text { Net income } & 2,620 & 2,312 \\\text { Operating cash flows } & 5,125 & 5,528 \\\text { Total assets } & 40,877 & 41,164\end{array}$
Calculate Lowe's and Home Depot's cash return on assets,cash flow to sales ratio,and asset turnover ratio for 2010.Which company has the better cash flow to sales ratio and which company has the better asset turnover ratio?

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Definitions:

Double Taxation

A taxation principle referring to income taxes paid twice on the same source of earned income; it can occur when income is taxed at both the corporate level and personal level.