Lowe’s Cos. Inc. (NYSE:LOW)

Net Fixed Asset Turnover

The net fixed asset turnover ratio showed a general upward trend from May 2020 through October 2022, increasing from 4.00 to a peak of 5.55. Following this peak, there was a gradual decline through August 2025, reaching 4.72. This indicates that the efficiency in generating sales from fixed assets improved significantly over the initial period but started to decrease moderately in the later periods.

Net Fixed Asset Turnover Including Operating Lease, Right-of-Use Asset

This ratio followed a similar pattern to the net fixed asset turnover but at a lower magnitude, starting at 3.31 in May 2020 and rising to a high of 4.62 in October 2022. After this peak, it declined steadily to 3.87 by August 2025. The inclusion of right-of-use assets generally results in lower turnover figures, and the declining trend post-peak suggests that the utilization of leased assets in generating revenue weakened in recent periods.

Total Asset Turnover

The total asset turnover ratio fluctuated throughout the observed periods. It started at 1.62 in May 2020, dipped slightly, then rose to 2.22 by February 2023, indicating improved efficiency in using total assets to generate sales. Post-February 2023, the ratio exhibited variability with a slight downward trend, settling at 1.79 in August 2025. This reflects some volatility in asset utilization effectiveness, with periods of both improvement and decline.

Equity Turnover

The equity turnover ratio data is incomplete and shows high variability in the early periods, with values such as 43.17, 18.46, and 20.95 before spiking dramatically to 62.35 and then 212.01. The lack of data beyond these points precludes trend analysis, but the initial data indicates substantial fluctuations in how effectively equity is being used to generate sales or revenues during the early periods.

The analysis of the financial data reveals distinct trends in net sales, property values, and fixed asset efficiency over the examined periods.

Net Sales

Net sales exhibit seasonal fluctuations with peaks generally occurring in mid-year quarters (July) and troughs in early-year quarters (January and February). The highest sales appear around the middle years of the series, notably July 2020 and July 2021, with values exceeding 27 billion US dollars, while the lowest values tend to be observed in early 2025 with sales declining to around 18.5 billion US dollars. There is an overall pattern of volatility rather than steady growth or decline, reflecting possibly seasonal demand variations or external market factors affecting sales volume.

Property, Less Accumulated Depreciation

Property values maintain a relatively stable range around 17,000 to 19,000 million US dollars throughout the periods. There is a slight downward trend visible starting from late 2020 continuing into early 2023, reaching a low near 17,200 million US dollars, followed by a gradual recovery toward approximately 17,700 million US dollars by mid-2025. This suggests steady investment and depreciation in fixed assets with no significant asset disposals or acquisitions changing the net book value drastically.

Net Fixed Asset Turnover

The net fixed asset turnover ratio shows a rising trend from 4.00 to a peak around 5.55 in late 2022, indicating improving efficiency in using fixed assets to generate sales over this period. After reaching the peak, the ratio slightly declines and stabilizes near 4.7 toward mid-2025. This pattern reflects initial improvements in leveraging property and equipment to drive sales, followed by a moderation or settling in asset utilization efficiency.

In summary, the financial ratios suggest that while the company’s sales are subject to notable seasonal and cyclical changes, the fixed asset base remains stable with slight depreciation offset by capital maintenance. The efficiency in using fixed assets to generate revenue improved significantly up to 2022 before moderating, pointing to effective asset management practices during the earlier years and a potential plateau in operational efficiency in recent quarters.

Net Sales

Over the observed periods, net sales exhibit a fluctuating pattern with notable volatility. Beginning at approximately 19,675 million USD, there is a significant increase peaking near 27,570 million USD around mid-2021. Subsequently, net sales experience several declines and partial recoveries, with values ebbing and flowing between roughly 18,600 million USD and 25,000 million USD in the more recent quarters. The general trend indicates initial strong growth followed by variability and a tapering off towards lower sales figures in the latest quarters.

Property, Net of Accumulated Depreciation (Including Operating Lease, Right-of-Use Asset)

This asset category remains relatively stable throughout the reported periods. Starting around 22,377 million USD, the net property value fluctuates marginally but shows no significant upward or downward trend. Minor variations occur within a narrow band between approximately 20,700 million USD and 23,200 million USD. In later quarters, there is a slight declining trend settling near the 21,400 to 21,600 million USD mark, suggesting minimal capital expenditure or asset disposals impacting net property value.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

The ratio indicates the efficiency of generating sales from net fixed assets. Initially, the turnover ratio shows an increasing trend, rising from about 3.31 to a peak near 4.62 in late 2022, suggesting improving asset utilization during this period. Following the peak, the ratio gradually declines to around 3.87 by mid-2025, indicating a reduction in asset usage efficiency relative to sales. This pattern mirrors the fluctuations observed in net sales, highlighting a period of improving efficiency followed by a tapering.

Overall Insights

The financial data reflect a business environment characterized by strong sales growth initially, accompanied by increasing operational efficiency in terms of asset utilization. However, the subsequent decline in both net sales and asset turnover ratios points to challenges in maintaining this performance. The stability in net property values suggests consistent asset levels without major expansions or disposals. These trends may imply the need for strategic adjustments to address the recent downturn in sales and efficiency metrics.

Net Sales

Over the analyzed periods, net sales exhibit a cyclical pattern with notable fluctuations. Initially, sales increased significantly from approximately 19,675 million USD to over 27,570 million USD within the first year and a quarter. Periodic declines follow, such as the drop from 27,570 million USD to around 21,340 million USD at the start of 2022. Subsequently, net sales experienced partial recoveries, reaching values close to 27,476 million USD by mid-2022, followed by a gradual decrease afterward. Towards the most recent quarters, net sales show a downward trend, falling from roughly 24,956 million USD to below 20,000 million USD before showing signs of stabilization around 20,930 to 23,959 million USD. This volatility suggests sensitivity to seasonal or market conditions, with no consistent upward or downward trajectory in the long run.

Total Assets

Total assets demonstrate relative stability with moderate fluctuations. Starting near 45,832 million USD, with occasional rises to over 51,200 million USD between 2020 and mid-2021, the asset base tends to contract afterward. A notable decline occurs from around 49,400 million USD in late 2021 to near 41,795 million USD by early 2024. Following this trough, total assets appear to recover somewhat, climbing back towards 45,372 to 46,614 million USD in the latest reported periods. This movement indicates some asset turnover and possible restructuring or investment cycles influencing the asset base, without substantial long-term growth or reduction in total assets.

Total Asset Turnover

The total asset turnover ratio generally reflects the efficiency with which the company uses its assets to generate sales. The ratio starts at 1.62 and shows an upward trend to peak levels around 2.16 in early 2022, indicating improved asset utilization. During mid to late 2022 and early 2023, the ratio remains relatively high, fluctuating between 2.04 and 2.22, representing strong operational efficiency. However, from mid-2023 onwards, a gradual decline is observable, with values reducing to approximately 1.79 by early 2025. Despite this decrease, turnover remains above the initial levels from 2020, suggesting that although efficiency has waned somewhat recently, it continues to be better than at the start of the period analyzed. The pattern suggests variable but generally effective asset management with some weakening in the most recent periods.

Net Sales

The net sales figures demonstrate notable fluctuations over the periods under review. Initially, net sales increased significantly from $19,675 million to $27,302 million, peaking in mid-2020. Subsequently, the sales experienced a downward adjustment but generally maintained a band between approximately $20,000 million and $27,000 million through late 2022. Starting from early 2023, net sales show considerable volatility, with a marked decline in early 2024 reaching approximately $18,603 million, followed by intermittent recoveries and declines. Overall, the trend indicates cyclical variations with peaks roughly every two to three quarters but no sustained growth beyond the early peak observed in 2020.

Shareholders’ Equity (Deficit)

Shareholders’ equity reveals a sharp negative trajectory throughout the timeframe. The equity position initially starts positive at $1,716 million, then increases to $4,356 million by mid-2020, suggesting a temporary strengthening of the capital base. However, from early 2021 onward, equity turns negative and deteriorates significantly, reaching a deficit of approximately -$14,710 million by mid-2023 and continuing this downward trend through to the latest period in mid-2025. This sustained equity erosion highlights ongoing capital depletion, signaling potential financial stress or significant losses affecting the firm's net assets.

Equity Turnover Ratio

The equity turnover ratio, which measures sales generated per unit of shareholder equity, shows extreme volatility in the earlier periods reported. It begins at 43.17, then decreases to 18.46, followed by a mild increase to 20.95 before sharply spiking to 62.35 and an exceptional peak of 212.01 by April 2021. The data for this metric is missing subsequently. The initial high ratio levels reflect strong sales relative to shareholders’ equity, especially during the period of rapidly declining equity. However, the absence of later data limits the ability to evaluate whether this trend continued.

Overall Insights

The data reflect a challenging financial environment characterized by oscillating sales and a continuous deterioration in shareholder equity. Despite periods of high net sales, the declining equity suggests that profitability or asset management issues may be causing net asset depletion. The volatility in equity turnover early on underscores a high leverage scenario where net sales were generated from a shrinking equity base. The negative equity trend raises concerns about solvency and capital adequacy, which could impact financing and operational flexibility if continued. Monitoring the company’s ability to stabilize or reverse this trend is crucial for future financial health.