Lowes and Home Depot Report the Following Information in Their

question 19

Essay

Lowes and Home Depot report the following information in their 2010 annual financial statements ($ in millions): $\begin{array}{lrr}\text { Lowes }&2010&2009\\\text { Sales } & \$ 47,220 & \$ 48,230 \\\text { Net income } & 1,783 & 2,195 \\\text { Operating cash flows } & 4,054 & 4,122 \\\text { Total assets } & 33,005 & 32,625\\\\\text { Home Depot }&2010&2009\\\text { Sales } & \$ 66,176 & \$ 71,288 \\\text { Net income } & 2,620 & 2,312 \\\text { Operating cash flows } & 5,125 & 5,528 \\\text { Total assets } & 40,877 & 41,164\end{array}$ 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?

Learn how to calculate the present value of a single future cash flow.

Understand the criterion for making investment decisions based on present value calculations.

Assess the impact of changes in interest rates on the present value of future cash flows.

Calculate the present value of an annuity.

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Definitions:

Atlantic Trading System

The network of trade routes connecting Europe, Africa, and the Americas from the 16th to the 19th century, facilitating the exchange of goods, people (including slaves), and culture.

Slaves

Individuals who are legally owned by others and are forced to work without pay, often without any rights or freedoms.

Tuscarora War

A conflict between the British, Dutch, and German settlers and the Tuscarora Native Americans in North Carolina during the early 18th century, leading to the defeat and relocation of the Tuscarora.

Algonquians

A group of Native American peoples sharing similar languages, originally inhabiting parts of eastern North America.