Financial statement analysis and common stock valuation

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin

An approach to decomposing Lowe’s Cos. Inc. return on equity, return on assets, and net profit margin ratio as the product of other financial ratios.

• Two-Component Disaggregation of ROE
• Three-Component Disaggregation of ROE
• Five-Component Disaggregation of ROE
• Two-Component Disaggregation of ROA
• Four-Component Disaggregation of ROA
• Disaggregation of Net Profit Margin

Balance Sheet: Assets

The assets reports major classes and amounts of resources owned or controlled by Lowe’s Cos. Inc..

Analysis of Long-term (Investment) Activity Ratios

Measures how efficiently Lowe’s Cos. Inc. generates revenues from its investments in fixed or total assets.

• Long-term Activity Ratios (Summary)
• Net Fixed Asset Turnover
• Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
• Total Asset Turnover
• Equity Turnover

Capital Asset Pricing Model (CAPM)

CAPM is a theory concentrated with deriving the expected rates of return on risky assets based on the assets’ systematic risk levels. Systematic risk is the variability of returns that is due to macroeconomic factors that affect all risky assets. It cannot be eliminated by diversification.

• Rates of Return
• Variance and Covariance
• Systematic Risk (β) Estimation
• Expected Rate of Return

Enterprise Value to FCFF (EV/FCFF)

Free cash flow to the firm is the cash flow available to the Lowe’s Cos. Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.

• Free Cash Flow to The Firm (FCFF)
• Interest Paid, Net of Tax
• EV to FCFF Ratio, Current
• EV to FCFF Ratio, Historical

Dividend Discount Model (DDM)

The dividend discount model (DDM) is a technique for estimating the value of a share of Lowe’s Cos. Inc. common stock issue as the present value of all future dividends.

• Intrinsic Stock Value (Valuation Summary)
• Required Rate of Return (r)
• Dividend Growth Rate (g)

Price to FCFE (P/FCFE)

Free cash flow to equity is the cash flow available to Lowe’s Cos. Inc. equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made.

• Free Cash Flow to Equity (FCFE)
• P to FCFE Ratio, Current
• P to FCFE Ratio, Historical

Common-Size Balance Sheet: Assets
Quarterly Data

Assets components shown as percentage of total assets.

Common-Size Income Statement
Quarterly Data

Income statement components (revenues and expenses) shown as percentage of total sales.

Statement of Comprehensive Income

Comprehensive income is the change in equity (net assets) of Lowe’s Cos. Inc. during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity

Liabilities and stockholders’ equity components shown as percentage of total liabilities and stockholders’ equity.

Common-Size Balance Sheet: Assets

Assets components shown as percentage of total assets.