Lowe's Cos. Inc. (LOW) | Profitability Analysis
Profitability ratios measure the company's ability to generate profitable sales from its resources (assets).
Ratios (Summary)
Lowe's Cos. Inc., profitability ratios
| Feb 1, 2013 | Feb 3, 2012 | Jan 28, 2011 | Jan 29, 2010 | Jan 30, 2009 | Feb 1, 2008 | ||
|---|---|---|---|---|---|---|---|
| Return on Sales | |||||||
| Gross profit margin | 34.30% | 34.56% | 35.14% | 34.86% | 34.21% | 34.64% | |
| Operating profit margin | 7.05% | 6.53% | 7.29% | 6.59% | 7.85% | 9.74% | |
| Net profit margin | 3.88% | 3.66% | 4.12% | 3.78% | 4.55% | 5.82% | |
| Return on Investment | |||||||
| Return on equity (ROE) | 14.14% | 11.12% | 11.10% | 9.35% | 12.16% | 17.45% | |
| Return on assets (ROA) | 6.00% | 5.48% | 5.96% | 5.40% | 6.72% | 9.10% | |
Source: Based on data from Lowe's Cos. Inc. Annual Reports
| Ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Lowe's Cos. Inc.'s gross profit margin deteriorated from 2011 to 2012 and from 2012 to 2013. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Lowe's Cos. Inc.'s operating profit margin deteriorated from 2011 to 2012 but then improved from 2012 to 2013 not reaching 2011 level. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Lowe's Cos. Inc.'s net profit margin deteriorated from 2011 to 2012 but then slightly improved from 2012 to 2013. |
| ROE | A profitability ratio calculated as net income divided by shareholders' equity. | Lowe's Cos. Inc.'s ROE improved from 2011 to 2012 and from 2012 to 2013. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Lowe's Cos. Inc.'s ROA deteriorated from 2011 to 2012 but then improved from 2012 to 2013 exceeding 2011 level. |
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Gross Profit Margin
| Feb 1, 2013 | Feb 3, 2012 | Jan 28, 2011 | Jan 29, 2010 | Jan 30, 2009 | Feb 1, 2008 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| Gross margin | 17,327 | 17,350 | 17,152 | 16,463 | 16,501 | 16,727 | |
| Net sales | 50,521 | 50,208 | 48,815 | 47,220 | 48,230 | 48,283 | |
| Gross profit margin1 | 34.30% | 34.56% | 35.14% | 34.86% | 34.21% | 34.64% | |
Source: Based on data from Lowe's Cos. Inc. Annual Reports
2013 Calculations
1 Gross profit margin = 100 × Gross margin ÷ Net sales
= 100 × 17,327 ÷ 50,521 = 34.30%
| Ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Lowe's Cos. Inc.'s gross profit margin deteriorated from 2011 to 2012 and from 2012 to 2013. |
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Operating Profit Margin
| Feb 1, 2013 | Feb 3, 2012 | Jan 28, 2011 | Jan 29, 2010 | Jan 30, 2009 | Feb 1, 2008 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| Pre-Interest and pre-tax earnings | 3,560 | 3,277 | 3,560 | 3,112 | 3,786 | 4,705 | |
| Net sales | 50,521 | 50,208 | 48,815 | 47,220 | 48,230 | 48,283 | |
| Operating Profit Margin, Comparison to Industry | |||||||
| Lowe's Cos. Inc.1 | 7.05% | 6.53% | 7.29% | 6.59% | 7.85% | 9.74% | |
| Industry, Consumer Services | –% | 8.30% | 8.38% | 7.93% | 7.50% | 5.80% | |
Source: Based on data from Lowe's Cos. Inc. Annual Reports
2013 Calculations
1 Operating profit margin = 100 × Pre-Interest and pre-tax earnings ÷ Net sales
= 100 × 3,560 ÷ 50,521 = 7.05%
| Ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Lowe's Cos. Inc.'s operating profit margin deteriorated from 2011 to 2012 but then improved from 2012 to 2013 not reaching 2011 level. |
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Net Profit Margin
| Feb 1, 2013 | Feb 3, 2012 | Jan 28, 2011 | Jan 29, 2010 | Jan 30, 2009 | Feb 1, 2008 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| Net earnings | 1,959 | 1,839 | 2,010 | 1,783 | 2,195 | 2,809 | |
| Net sales | 50,521 | 50,208 | 48,815 | 47,220 | 48,230 | 48,283 | |
| Net Profit Margin, Comparison to Industry | |||||||
| Lowe's Cos. Inc.1 | 3.88% | 3.66% | 4.12% | 3.78% | 4.55% | 5.82% | |
| Industry, Consumer Services | –% | 4.90% | 5.08% | 4.65% | 4.41% | 2.95% | |
Source: Based on data from Lowe's Cos. Inc. Annual Reports
2013 Calculations
1 Net profit margin = 100 × Net earnings ÷ Net sales
= 100 × 1,959 ÷ 50,521 = 3.88%
| Ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Lowe's Cos. Inc.'s net profit margin deteriorated from 2011 to 2012 but then slightly improved from 2012 to 2013. |
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Return on Equity (ROE)
| Feb 1, 2013 | Feb 3, 2012 | Jan 28, 2011 | Jan 29, 2010 | Jan 30, 2009 | Feb 1, 2008 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| Net earnings | 1,959 | 1,839 | 2,010 | 1,783 | 2,195 | 2,809 | |
| Shareholders' equity | 13,857 | 16,533 | 18,112 | 19,069 | 18,055 | 16,098 | |
| ROE, Comparison to Industry | |||||||
| Lowe's Cos. Inc.1 | 14.14% | 11.12% | 11.10% | 9.35% | 12.16% | 17.45% | |
| Industry, Consumer Services | –% | 17.43% | 17.61% | 14.97% | 15.04% | 9.81% | |
Source: Based on data from Lowe's Cos. Inc. Annual Reports
2013 Calculations
1 ROE = 100 × Net earnings ÷ Shareholders' equity
= 100 × 1,959 ÷ 13,857 = 14.14%
| Ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders' equity. | Lowe's Cos. Inc.'s ROE improved from 2011 to 2012 and from 2012 to 2013. |
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Return on Assets (ROA)
| Feb 1, 2013 | Feb 3, 2012 | Jan 28, 2011 | Jan 29, 2010 | Jan 30, 2009 | Feb 1, 2008 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| Net earnings | 1,959 | 1,839 | 2,010 | 1,783 | 2,195 | 2,809 | |
| Total assets | 32,666 | 33,559 | 33,699 | 33,005 | 32,686 | 30,869 | |
| ROA, Comparison to Industry | |||||||
| Lowe's Cos. Inc.1 | 6.00% | 5.48% | 5.96% | 5.40% | 6.72% | 9.10% | |
| Industry, Consumer Services | –% | 7.67% | 7.93% | 7.12% | 6.96% | 4.23% | |
Source: Based on data from Lowe's Cos. Inc. Annual Reports
2013 Calculations
1 ROA = 100 × Net earnings ÷ Total assets
= 100 × 1,959 ÷ 32,666 = 6.00%
| Ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | Lowe's Cos. Inc.'s ROA deteriorated from 2011 to 2012 but then improved from 2012 to 2013 exceeding 2011 level. |
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