Lowe's Companies, Inc.
(5 pages of text)
Crystal Anderson was evaluating her investment portfolio. She was searching for new equities to purchase before the end of the current RRSP season and wanted to diversify her current holdings by investing in the home improvement retail industry, specifically in Lowe’s Companies, Inc. Lowe’s, headquartered in the United States, was a major home improvement retailer and was currently undergoing an expansion into the Canadian market. She had just received the company’s annual reports with its last three years’ financial results. She wanted to assess the retailer’s past financial performance, including the risks and opportunities associated with the industry and the retailer’s corporate strategy. She would decide whether to invest in Lowe’s, based on her analysis.
This case is best positioned as a financial analysis case in an undergraduate business course. The analysis is designed to be introductory and achieve the following objectives:
- To introduce students to the calculation and interpretation of financial ratios as an analytical tool for business decision making.
- To improve students’ evaluation of financial ratios by instructing them to assess trends in data and make company-specific comparisons to industry benchmarks.
- To provide students with an opportunity to interpret and analyze a statement of cash flows.
- To improve students' abilities to make an investment decision utilizing both quantitative and qualitative information.
United States, 2012
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