Mini Project 2

In this project, you are supposed to be a financial manager working for a big corporation. You will determine the cost of debt, cost of preferred stock, cost of common equity, capital structure, and the weighted average cost of capital (WACC) for a publicly traded company of your choice.

University of Houston-Victoria FINC 6352- Financial Management Dr. Xavier Garza Gomez Mini Project 2

Capital Structure and Cost of Capital

1. Purpose of the project: In this project, you are supposed to be a financial manager working for a big corporation and you have to apply the knowledge obtained from the financial management (FINC6352) course. You will determine the cost of debt, cost of preferred stock, cost of common equity, capital structure, and the weighted average cost of capital (WACC) for a publicly traded company of your choice. 2. Outline for the project:

(1) Cost of capital components – Estimate the firm’s before-tax and after-tax component cost of debt; – Estimate the firm’s component cost of preferred stock; – Use three approaches (CAPM, DCF, bond-yield-plus-risk-premium) to estimate the component cost of common equity of the firm. Include your own calculation of the beta for the company. (2) Estimate Capital Structure – Estimate the firm’s weights of debt, preferred stock, and common stock using the firm’s balance sheet (book value) – Estimate the firm’s weights of debt, preferred stock, and common stock using the market value of each capital component – Calculate the firm’s weighted average cost of capital (WACC) with both structures

3. Other information regarding the project:

(1) Your project should be well-organized and typed in a Word document, but you must attach the Excel file with your report. The style and organization part of the project account for 10 percent of the grade. (2) Information obtained in this MP will be used in other mini projects so any feedback received on the calculation of WACC must be incorporated for the next Mini project.

This mini project is worth 60 points (out of 1000).

Compet1

Home Depot Inc (NYS: HD)
Exchange rate used is that of the Year End reported date
HD
Profitability Ratios	01/31/2021	02/02/2020	02/03/2019	01/28/2018	01/29/2017	01/31/2016	02/01/2015	02/02/2014	02/03/2013	01/29/2012	01/30/2011	01/31/2010	02/01/2009	02/03/2008	01/28/2007
ROA % (Net)	21.18	23.67	24.72	19.78	18.66	17.04	15.81	13.23	10.94	9.66	8.26	6.5	5.3	8.95	11.94
ROE % (Net)	14099.83	AvgEqty<0	AvgEqty<0	299.07	149.85	89.89	58.25	35.64	25.01	21.17	17.49	14.36	12.77	20.23	22.24
ROI % (Operating)	53.2	57.05	54.76	52.19	48.46	43.61	39.05	32.93	26.69	23.3	20.29	16.53	14.48	21.01	28.66
EBITDA Margin %	15.67	16.39	16.27	16.59	16.28	15.41	14.73	13.86	12.64	11.85	11.11	9.99	8.78	11.83	12.72
Calculated Tax Rate %	24.22	23.6	23.6	37	36.3	36.4	36.4	36.4	37.2	36.01	36.7	34.2	35.6	36.4	38.11
Revenue per Employee	262427	265884	257756	244991	233633	230551	224810	216516	216309	213258	212411	209331	222000	229904	250238
Liquidity Ratios	01/31/2021	02/02/2020	02/03/2019	01/28/2018	01/29/2017	01/31/2016	02/01/2015	02/02/2014	02/03/2013	01/29/2012	01/30/2011	01/31/2010	02/01/2009	02/03/2008	01/28/2007
Quick Ratio	0.47	0.23	0.22	0.34	0.32	0.33	0.28	0.31	0.34	0.34	0.16	0.23	0.13	0.14	0.3
Current Ratio	1.23	1.08	1.11	1.17	1.25	1.36	1.36	1.42	1.34	1.55	1.33	1.34	1.2	1.15	1.39
Net Current Assets % TA	7.52	2.8	4.12	6.15	8.36	10.5	10.1	11.18	9.52	12.7	8.37	8.65	5.37	4.44	9.7
Debt Management	01/31/2021	02/02/2020	02/03/2019	01/28/2018	01/29/2017	01/31/2016	02/01/2015	02/02/2014	02/03/2013	01/29/2012	01/30/2011	01/31/2010	02/01/2009	02/03/2008	01/28/2007
LT Debt to Equity	10.86	Equity<0	Equity<0	16.69	5.16	3.31	1.81	1.17	0.53	0.6	0.46	0.45	0.54	0.64	0.47
Total Debt to Equity	11.29	Equity<0	Equity<0	18.59	5.45	3.37	1.84	1.18	0.61	0.6	0.52	0.5	0.64	0.76	0.47
Interest Coverage	14.06	14.05	15.94	14.93	14.35	15.64	21.24	13.11	14.25	11.23	10.32	5.85	5.67	11.64	26.5
Asset Management	01/31/2021	02/02/2020	02/03/2019	01/28/2018	01/29/2017	01/31/2016	02/01/2015	02/02/2014	02/03/2013	01/29/2012	01/30/2011	01/31/2010	02/01/2009	02/03/2008	01/28/2007
Total Asset Turnover	2.17	2.32	2.4	2.31	2.22	2.15	2.07	1.94	1.8	1.75	1.68	1.62	1.67	1.58	1.88
Receivables Turnover	51.97	54.69	54.76	50.83	48.41	52.62	57.88	56.59	55.72	60.59	66.55	68.55	64.08	33.96	32.42
Inventory Turnover	5.6	5.11	5.33	5.26	5.11	5.09	4.9	4.72	4.65	4.4	4.29	4.2	4.22	4.18	5.04
Accounts Payable Turnover	13.66	14.22	14.19	14.21	13.99	14.35	14.38	14.15	14.38	14.75	14.23	13.7	13.55	11.63	13.61
Accrued Expenses Turnover	27.32	26.67	26.86	27.02	26.58	26.68	26.18	25.6	24.8	24.62	24.11	23.59	24.99	24.63	30.09
Property Plant & Equip Turnover	5.58	4.9	4.79	4.6	4.3	3.95	3.62	3.33	3.03	2.85	2.69	2.56	2.66	2.81	3.54
Cash & Equivalents Turnover	26.42	56.52	39.63	33	39.91	45.07	45.68	35.74	32.83	55.76	69.36	68.41	148.31	145.64	130.78
Per Share	01/31/2021	02/02/2020	02/03/2019	01/28/2018	01/29/2017	01/31/2016	02/01/2015	02/02/2014	02/03/2013	01/29/2012	01/30/2011	01/31/2010	02/01/2009	02/03/2008	01/28/2007
Cash Flow per Share	17.59	12.59	11.28	10.24	7.98	7.36	6.18	5.37	4.58	4.27	2.79	3.05	3.3	3.05	3.74
Book Value per Share	3.06	-2.89	-1.7	1.26	3.6	5.04	7.13	9.07	11.98	11.64	11.64	11.42	10.48	10.48	12.71

ratios company

Lowe's Companies Inc (NYS: LOW)
Exchange rate used is that of the Year End reported date
LOW
Profitability Ratios	01/29/2021	01/31/2020	02/01/2019	02/02/2018	02/03/2017	01/29/2016	01/30/2015	01/31/2014	02/01/2013	02/03/2012	01/28/2011	01/29/2010	01/30/2009	02/01/2008	02/02/2007
ROA % (Net)	13.57	11.61	6.65	9.92	9.27	8.09	8.38	7.01	5.93	5.38	6.04	5.44	6.93	9.61	11.87
ROE % (Net)	343.27	152.88	48.76	56.17	43.2	28.98	24.8	17.83	12.93	10.44	10.84	9.63	12.89	17.7	20.71
ROI % (Operating)	43.48	30.78	18.86	29.35	27.11	23.94	21.99	18.36	15.16	13.2	14.62	12.93	16.19	21.98	27.17
EBITDA Margin %	11.26	10.69	7.6	10.96	11.3	10.93	11.16	10.5	10.06	9.47	10.54	10.01	11.04	12.57	13.45
Calculated Tax Rate %	24.6	23.87	31.82	37.2	40.53	42.39	36.9	37.76	37.55	36.72	37.73	36.88	37.39	37.73	37.88
Revenue per Employee	264245	226082	238350	221960	220571	219394	211945	204442	206775	199177	209184	198116	211190	224147	224076
Liquidity Ratios	01/29/2021	01/31/2020	02/01/2019	02/02/2018	02/03/2017	01/29/2016	01/30/2015	01/31/2014	02/01/2013	02/03/2012	01/28/2011	01/29/2010	01/30/2009	02/01/2008	02/02/2007
Quick Ratio	0.28	0.06	0.05	0.06	0.05	0.07	0.06	0.06	0.09	0.16	0.16	0.14	0.08	0.07	0.12
Current Ratio	1.19	1.01	0.98	1.06	1	1.01	1.08	1.16	1.27	1.28	1.4	1.32	1.15	1.12	1.27
Net Current Assets % TA	7.69	0.34	-0.78	1.92	0.08	0.22	2.3	4.34	6.36	6.5	8.45	7.2	3.76	3.03	6.39
Debt Management	01/29/2021	01/31/2020	02/01/2019	02/02/2018	02/03/2017	01/29/2016	01/30/2015	01/31/2014	02/01/2013	02/03/2012	01/28/2011	01/29/2010	01/30/2009	02/01/2008	02/02/2007
LT Debt to Equity	14.38	8.5	3.95	2.65	2.24	1.51	1.08	0.85	0.65	0.43	0.36	0.24	0.28	0.35	0.28
Total Debt to Equity	15.16	9.79	4.45	2.89	2.44	1.65	1.14	0.89	0.66	0.46	0.36	0.27	0.34	0.41	0.28
Interest Coverage	11.38	9.14	6.44	10.4	9.06	9.01	9.29	8.72	8.42	8.83	10.72	10.84	13.52	24.25	33.45
Asset Management	01/29/2021	01/31/2020	02/01/2019	02/02/2018	02/03/2017	01/29/2016	01/30/2015	01/31/2014	02/01/2013	02/03/2012	01/28/2011	01/29/2010	01/30/2009	02/01/2008	02/02/2007
Total Asset Turnover	2.08	1.96	2.05	1.97	1.95	1.88	1.75	1.64	1.53	1.47	1.47	1.44	1.52	1.65	1.79
Receivables Turnover	–	–	–	–	–	–	–	–	–	–	–	–	–	–	5228.44
Inventory Turnover	4.09	3.82	4.04	4.14	4.27	4.19	4.07	3.94	3.92	3.94	3.82	3.74	4.01	4.28	4.44
Accounts Payable Turnover	9.69	9.08	9.62	10.39	10.41	11.01	11.13	11.08	11.25	11.35	11.33	11.28	12.37	13.38	14.81
Accrued Expenses Turnover	50.07	52.37	53.48	50.3	46.34	44.72	44.58	45.76	48	58.73	78.7	93.67	112.73	121.65	118.23
Property Plant & Equip Turnover	4.75	3.9	3.75	3.47	3.24	2.99	2.76	2.53	2.33	2.24	2.2	2.09	2.19	2.4	2.66
Cash & Equivalents Turnover	33.24	117.92	130.13	120.08	132.85	136.02	131.57	114.94	65.16	59.3	76.24	107.98	183.89	150.13	119.58
Per Share	01/29/2021	01/31/2020	02/01/2019	02/02/2018	02/03/2017	01/29/2016	01/30/2015	01/31/2014	02/01/2013	02/03/2012	01/28/2011	01/29/2010	01/30/2009	02/01/2008	02/02/2007
Cash Flow per Share	14.81	5.54	7.66	6.05	6.28	5.17	5	3.89	3.28	3.37	2.76	2.78	2.84	2.94	2.94
Book Value per Share	1.97	2.58	4.55	7.08	7.43	8.41	10.38	11.51	12.48	13.32	13.38	13.07	12.28	11.04	10.31

Compet2

Walmart Inc (NYS: WMT)
Exchange rate used is that of the Year End reported date
WMT
Profitability Ratios	01/31/2021	01/31/2020	01/31/2019	01/31/2018	01/31/2017	01/31/2016	01/31/2015	01/31/2014	01/31/2013	01/31/2012	01/31/2011	01/31/2010	01/31/2009	01/31/2008	01/31/2007
ROA % (Net)	5.51	6.53	3.15	4.89	6.83	7.29	8.01	7.86	8.55	8.39	9.33	8.58	8.17	8.09	7.8
ROE % (Net)	17.32	20.22	8.87	12.67	17.19	18.15	20.76	21	22.96	22.45	23.53	21.08	20.58	20.18	19.67
ROI % (Operating)	17.37	15.84	17.23	16.48	17.85	18.38	20.51	20.41	21.73	21.85	22.16	21.82	20.98	20.96	21.29
EBITDA Margin %	6.07	6.4	4.72	5.56	6.74	6.95	7.46	7.49	7.72	7.75	7.86	7.63	7.27	7.47	7.46
Calculated Tax Rate %	33.35	24.43	37.36	30.42	30.27	30.31	32.2	32.87	31.01	32.56	32.2	32.35	34.19	34.2	33.56
Revenue per Employee	242445	238165	233820	217540	210672	219150	220750	216497	212673	203159	200880	194388	192618	180380	183500
Liquidity Ratios	01/31/2021	01/31/2020	01/31/2019	01/31/2018	01/31/2017	01/31/2016	01/31/2015	01/31/2014	01/31/2013	01/31/2012	01/31/2011	01/31/2010	01/31/2009	01/31/2008	01/31/2007
Quick Ratio	0.26	0.2	0.18	0.16	0.19	0.22	0.24	0.2	0.2	0.2	0.21	0.22	0.2	0.16	0.2
Current Ratio	0.97	0.79	0.8	0.76	0.86	0.93	0.97	0.88	0.83	0.88	0.89	0.87	0.88	0.81	0.9
Net Current Assets % TA	-1.02	-6.76	-7.1	-9.22	-4.65	-2.19	-0.98	-3.99	-5.85	-3.79	-3.65	-4.24	-3.94	-6.65	-3.42
Debt Management	01/31/2021	01/31/2020	01/31/2019	01/31/2018	01/31/2017	01/31/2016	01/31/2015	01/31/2014	01/31/2013	01/31/2012	01/31/2011	01/31/2010	01/31/2009	01/31/2008	01/31/2007
LT Debt to Equity	0.56	0.64	0.69	0.47	0.54	0.55	0.54	0.58	0.54	0.66	0.64	0.51	0.53	0.52	0.5
Total Debt to Equity	0.6	0.73	0.8	0.6	0.59	0.62	0.62	0.74	0.71	0.75	0.73	0.58	0.65	0.69	0.63
Interest Coverage	10.28	8.53	10.31	9.38	10.04	9.77	11.56	12.13	13.47	12.3	12.75	12.71	12	12.23	13.41
Asset Management	01/31/2021	01/31/2020	01/31/2019	01/31/2018	01/31/2017	01/31/2016	01/31/2015	01/31/2014	01/31/2013	01/31/2012	01/31/2011	01/31/2010	01/31/2009	01/31/2008	01/31/2007
Total Asset Turnover	2.28	2.3	2.43	2.48	2.43	2.39	2.38	2.34	2.36	2.39	2.4	2.44	2.47	2.41	2.41
Receivables Turnover	87.13	83.39	86.48	87.4	84.57	77.75	72.19	70.85	73.65	81.07	91.38	101.43	107.02	116.66	126.74
Inventory Turnover	9.4	8.9	8.75	8.6	8.26	8.06	8.11	8.08	8.34	8.7	9.08	9	8.79	8.32	8.02
Accounts Payable Turnover	11.6	11.14	11.04	11.43	12.13	12.54	12.81	12.62	12.53	12.74	13.18	13.77	13.66	12.96	13.04
Accrued Expenses Turnover	25.49	25.41	24.85	23.64	23.24	23.93	24.32	23.36	23.2	23.42	21.66	20.99	22.72	23.53	23.1
Property Plant & Equip Turnover	5.65	5	4.85	4.65	4.45	4.3	4.23	4.15	4.19	4.16	4.12	4.24	4.33	4.23	4.32
Cash & Equivalents Turnover	40.99	60.97	71.06	73.46	62.23	54.05	59.17	63.24	65.3	64.1	55.14	53.78	62.99	58.54	50.58
Per Share	01/31/2021	01/31/2020	01/31/2019	01/31/2018	01/31/2017	01/31/2016	01/31/2015	01/31/2014	01/31/2013	01/31/2012	01/31/2011	01/31/2010	01/31/2009	01/31/2008	01/31/2007
Cash Flow per Share	12.71	8.86	9.48	9.46	10.14	8.54	8.84	7.11	7.56	7.01	6.47	6.79	5.86	5.01	4.84
Book Value per Share	28.69	26.37	25.19	26.38	25.52	25.47	25.21	23.59	23.04	20.86	19.49	18.69	16.63	16.26	14.91

Compet3

Exchange rate used is that of the Year End reported date

Profitability Ratios

12/29/2019

12/30/2018

12/31/2017

01/01/2017

01/03/2016

12/28/2014

12/29/2013

12/30/2012

01/01/2012

01/02/2011

01/03/2010

12/28/2008

12/30/2007

12/31/2006

01/01/2006

ROA % (Net)

ROE % (Net)

ROI % (Operating)

EBITDA Margin %

Calculated Tax Rate %

Revenue per Employee

Liquidity Ratios

Quick Ratio

Current Ratio

Net Current Assets % TA

Debt Management

LT Debt to Equity

Total Debt to Equity

Interest Coverage

Asset Management

Total Asset Turnover

Receivables Turnover

Inventory Turnover

Accounts Payable Turnover

Accrued Expenses Turnover

Property Plant & Equip Turnover

Cash & Equivalents Turnover

Per Share

Cash Flow per Share

Book Value per Share

asreported

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Lowe's Companies Inc (NYS: LOW)
Exchange rate used is that of the Year End reported date
As Reported Annual Balance Sheet
Report Date	01/29/2021	01/31/2020	02/01/2019	02/02/2018	02/03/2017	01/29/2016	01/30/2015	01/31/2014	02/01/2013	02/03/2012	01/28/2011	01/29/2010	01/30/2009	02/01/2008	02/02/2007
Currency	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD
Audit Status	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified
Consolidated	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Scale	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands
Cash & cash equivalents	4690000	716000	511000	588000	558000	405000	466000	391000	541000	1014000	652000	632000	245000	281000	364000
Short-term investments	506000	160000	218000	102000	100000	307000	125000	185000	125000	286000	471000	425000	416000	249000	432000
Merchandise inventory – net	16193000	13179000	12561000	11393000	10458000	9458000	8911000	9127000	8600000	8355000	8321000	8249000	8209000	7611000	7144000
Deferred income taxes, net	–	–	–	–	–	–	230000	252000	217000	183000	193000	208000	166000	247000	161000
Other current assets	937000	1263000	938000	689000	884000	391000	348000	341000	301000	234000	330000	218000	215000	298000	213000
Total current assets	22326000	15318000	14228000	12772000	12000000	10561000	10080000	10296000	9784000	10072000	9967000	9732000	9251000	8686000	8314000
Land	7315000	7200000	7196000	7414000	7329000	7086000	7040000	7016000	6986000	6936000	6742000	6519000	6144000	5566000	5496000
Buildings	–	–	–	–	–	–	–	–	–	–	–	12069000	11258000	10036000	9655000
Buildings & building improvements	18090000	17862000	18052000	18521000	18147000	17451000	17247000	17161000	16968000	16640000	16531000	–	–	–	–
Equipment	10466000	10377000	10090000	10475000	10978000	10863000	10426000	10063000	9780000	9835000	9142000	8826000	8797000	8118000	7477000
Leasehold improvements	–	–	–	–	–	–	–	–	–	–	–	3818000	3576000	3063000	2476000
Construction in progress	831000	506000	525000	530000	464000	513000	730000	834000	932000	921000	930000	1036000	1702000	2053000	–
Total cost	36702000	35945000	35863000	36940000	36918000	35913000	35443000	35074000	34666000	34332000	33345000	32268000	31477000	28836000	25104000
Less: accumulated depreciation	17547000	17276000	17431000	17219000	16969000	16336000	15409000	14240000	13189000	12362000	11256000	9769000	8755000	7475000	6133000
Property, less accumulated depreciation	19155000	18669000	18432000	19721000	19949000	19577000	20034000	20834000	21477000	21970000	22089000	22499000	22722000	21361000	18971000
Operating lease right-of-use assets	3832000	3891000	–	–	–	–	–	–	–	–	–	–	–	–	–
Long-term investments	200000	372000	256000	408000	366000	222000	354000	279000	271000	504000	1008000	277000	253000	509000	165000
Deferred income taxes – net	340000	216000	294000	168000	222000	241000	–	–	–	–	–	–	–	–	–
Goodwill	–	303000	303000	1307000	1082000	–	–	–	–	–	–	–	–	–	–
Other assets	882000	702000	995000	915000	789000	665000	1359000	1323000	1134000	1013000	635000	497000	460000	313000	317000
Total assets	46735000	39471000	34508000	35291000	34408000	31266000	31827000	32732000	32666000	33559000	33699000	33005000	32686000	30869000	27767000
Short-term borrowings	–	1941000	722000	1137000	510000	43000	–	386000	–	–	–	–	987000	1064000	23000
Current maturities of long-term debt	1112000	597000	1110000	294000	795000	1061000	552000	49000	47000	592000	36000	552000	34000	40000	88000
Current operating lease liabilities	541000	501000	–	–	–	–	–	–	–	–	–	–	–	–	–
Accounts payable	10884000	7659000	8279000	6590000	6651000	5633000	5124000	5008000	4657000	4352000	4351000	4287000	4109000	3713000	3524000
Accrued salaries & wages	–	–	–	–	–	–	–	–	–	–	–	–	–	424000	372000
Accrued compensation & employee benefits	1350000	684000	662000	747000	790000	820000	773000	785000	670000	613000	667000	577000	434000	–	–
Self-insurance liabilities	–	–	–	–	–	–	–	–	–	–	–	–	751000	671000	650000
Deferred revenue	1608000	1219000	1299000	1378000	1253000	1078000	979000	892000	824000	801000	707000	683000	674000	717000	731000
Accrued dividends	440000	420000	385000	340000	304000	255000	222000	186000	178000	174000	–	–	–	–	–
Self-insurance liabilities	435000	501000	378000	347000	327000	343000	346000	324000	316000	318000	–	–	–	–	–
Sales return reserve	252000	194000	194000	–	–	–	–	–	–	–	–	–	–	–	–
Sales tax liabilities	256000	153000	184000	184000	210000	140000	131000	122000	104000	158000	–	–	–	–	–
Accrued interest	250000	221000	179000	144000	194000	179000	165000	153000	136000	126000	–	–	–	–	–
Income taxes payable	168000	–	–	–	–	–	–	–	–	–	–	–	–	–	–
Accrued property taxes	120000	104000	108000	109000	108000	111000	124000	121000	112000	102000	–	–	–	–	–
Other current liabilities	1314000	988000	997000	826000	832000	829000	932000	850000	664000	655000	–	–	–	–	–
Other current liabilities	3235000	2581000	2425000	1950000	1975000	1857000	1920000	1756000	1510000	1533000	–	–	–	–	–
Other current liabilities	–	–	–	–	–	–	–	–	–	–	1358000	1256000	1033000	1122000	1151000
Total current liabilities	18730000	15182000	14497000	12096000	11974000	10492000	9348000	8876000	7708000	7891000	7119000	7355000	8022000	7751000	6539000
Secured mortgage notes	5000	5000	6000	6000	7000	7000	16000	17000	19000	20000	17000	35000	27000	33000	30000
Unsecured debt – notes	21121000	16648000	14721000	14961000	14321000	12073000	10860000	9617000	8627000	7189000	6192000	500000	500000	499000	498000
Debentures	–	–	–	–	–	–	–	–	–	–	–	694000	694000	694000	693000
Medium-term notes	–	–	–	–	–	–	–	–	–	–	–	232000	232000	237000	27000
Senior notes	–	–	–	–	–	–	–	–	–	–	–	3276000	3273000	3271000	267000
Convertible notes	–	–	–	–	–	–	–	–	–	–	–	–	–	511000	1980000
Convertible subordinated notes	–	–	–	–	–	–	–	–	–	–	–	–	–	–	518000
Finance or capitalized lease obligations	654000	712000	774000	891000	861000	526000	491000	501000	431000	418000	364000	–	–	–	–
Capital leases & other long-term debt	–	–	–	–	–	–	–	–	–	–	–	343000	347000	371000	400000
Total long-term debt	21780000	17365000	15501000	15858000	15189000	12606000	11367000	10135000	9077000	7627000	6573000	5080000	5073000	5616000	4413000
Less: current maturities	1112000	597000	1110000	294000	795000	1061000	552000	49000	47000	592000	36000	552000	34000	40000	88000
Long-term debt, excluding current maturities	20668000	16768000	14391000	15564000	14394000	11545000	10815000	10086000	9030000	7035000	6537000	4528000	5039000	5576000	4325000
Noncurrent operating lease liabilities	3890000	3943000	–	–	–	–	–	–	–	–	–	–	–	–	–
Deferred income taxes – net	–	–	–	–	–	–	97000	291000	455000	531000	467000	598000	660000	670000	735000
Deferred revenue – extended protection plans	1019000	894000	827000	803000	763000	729000	730000	730000	715000	704000	631000	–	–	–	–
Other liabilities	991000	712000	1149000	955000	843000	846000	869000	896000	901000	865000	833000	1455000	910000	774000	443000
Total liabilities	45298000	37499000	30864000	29418000	27974000	23612000	21859000	20879000	18809000	17026000	15587000	13936000	14631000	14771000	12042000
Common stock	366000	381000	401000	415000	433000	455000	480000	515000	555000	621000	677000	729000	735000	729000	762000
Capital in excess of par value	90000	–	–	22000	–	–	–	–	26000	14000	11000	6000	277000	16000	102000
Retained earnings (accumulated deficit)	1117000	1727000	3452000	5425000	6241000	7593000	9591000	11355000	13224000	15852000	17371000	18307000	17049000	15345000	14860000
Accumulated other comprehensive income (loss)	-136000	-136000	-209000	11000	-240000	-394000	-103000	-17000	52000	46000	53000	27000	-6000	8000	1000
Total shareholders' equity (deficit)	1437000	1972000	3644000	5873000	6434000	7654000	9968000	11853000	13857000	16533000	18112000	19069000	18055000	16098000	15725000
As Reported Annual Income Statement
Report Date	01/29/2021	01/31/2020	02/01/2019	02/02/2018	02/03/2017	01/29/2016	01/30/2015	01/31/2014	02/01/2013	02/03/2012	01/28/2011	01/29/2010	01/30/2009	02/01/2008	02/02/2007
Currency	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD
Audit Status	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified
Consolidated	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Scale	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands
Net sales	89597000	72148000	71309000	68619000	65017000	59074000	56223000	53417000	50521000	50208000	48815000	47220000	48230000	48283000	46927000
Cost of sales	60025000	49205000	48401000	45210000	42553000	38504000	36665000	34941000	33194000	32858000	31663000	30757000	31729000	31556000	30729000
Gross margin	29572000	22943000	22908000	23409000	22464000	20570000	19558000	18476000	17327000	17350000	17152000	16463000	16501000	16727000	16198000
Selling, general & administrative expenses	18526000	15367000	17413000	15376000	15129000	14115000	13281000	12865000	12244000	12593000	12006000	11688000	11074000	10515000	9738000
Store opening costs	–	–	–	–	–	–	–	–	–	–	–	49000	102000	141000	146000
Depreciation	–	–	–	–	–	1484000	1485000	1462000	1523000	1480000	1586000	1614000	1539000	1366000	1162000
Depreciation & amortization expenses	1399000	1262000	1477000	1447000	1489000	–	–	–	–	–	–	–	–	–	–
Operating income (loss)	9647000	6314000	4018000	6586000	5846000	–	–	–	–	–	–	–	–	–	–
Interest expense on long-term debt	807000	668000	582000	582000	583000	505000	470000	431000	418000	341000	312000	293000	292000	247000	183000
Interest expense on lease obligations	32000	–	–	–	–	–	–	–	–	–	–	–	–	–	–
Interest expense on short-term borrowings	13000	–	–	–	–	–	–	–	–	–	–	2000	11000	–	–
Interest expense on capitalized lease obligations	–	30000	58000	56000	53000	42000	42000	40000	37000	38000	35000	32000	31000	32000	34000
Interest income	24000	27000	28000	16000	12000	4000	6000	4000	9000	12000	12000	17000	40000	45000	52000
Interest capitalized	–	1000	3000	5000	4000	3000	2000	4000	4000	10000	14000	19000	36000	65000	32000
Interest on tax uncertainties	–	–	3000	-3000	2000	-1000	-1000	6000	-27000	8000	7000	-9000	–	–	–
Other interest expense	20000	21000	12000	19000	23000	13000	13000	7000	8000	6000	4000	5000	22000	25000	21000
Interest – net	-848000	-691000	-624000	-633000	-645000	-552000	-516000	-476000	-423000	-371000	-332000	-287000	-280000	-194000	-154000
Gain (loss) on extinguishment of debt	-1060000	–	–	-464000	–	–	–	–	–	–	–	–	–	–	–
Total expenses	–	–	–	–	–	16151000	15282000	14803000	14190000	14444000	13924000	13638000	12995000	12216000	11200000
Pre-tax earnings (losses)	7739000	5623000	3394000	5489000	5201000	4419000	4276000	3673000	3137000	2906000	3228000	2825000	3506000	4511000	4998000
Current provision (benefit) for income taxes – federal	1578000	935000	963000	1734000	1824000	1688000	1475000	1342000	1162000	891000	1171000	1046000	1070000	1495000	1657000
Current provision (benefit) for income taxes – state	425000	268000	274000	252000	275000	248000	221000	203000	155000	124000	188000	123000	166000	207000	242000
Total current provision (benefit) for income taxes	2003000	1203000	1237000	1986000	2099000	1936000	1696000	1545000	1317000	1015000	1359000	1169000	1236000	1702000	1899000
Deferred provision (benefit) for income taxes – federal	-73000	121000	-102000	60000	6000	-59000	-112000	-133000	-133000	50000	-117000	-108000	82000	-1000	-11000
Deferred provision (benefit) for income taxes – state	-26000	18000	-55000	-4000	3000	-4000	-6000	-25000	-6000	2000	-24000	-19000	-7000	1000	5000
Total deferred provision (benefit) of deferred income taxes	-99000	139000	-157000	56000	9000	-63000	-118000	-158000	-139000	52000	-141000	-127000	75000	–	-6000
Income tax provision (benefit)	1904000	1342000	1080000	2042000	2108000	1873000	1578000	1387000	1178000	1067000	1218000	1042000	1311000	1702000	1893000
Net earnings (loss)	5835000	4281000	2314000	3447000	3093000	2546000	2698000	2286000	1959000	1839000	2010000	1783000	2195000	2809000	3105000
Less: net earnings allocable to participating securities	24000	13000	7000	11000	11000	12000	16000	16000	14000	15000	17000	13000	–	–	–
Less: Premium paid to acquire noncontrolling interest	–	–	–	–	18000	–	–	–	–	–	–	–	–	–	–
Net earnings (loss) allocable to common shares	5811000	4268000	2307000	3436000	3062000	2534000	2682000	2270000	1945000	1824000	1993000	1770000	–	–	–
Weighted average shares outstanding – basic	748000	777000	811000	839000	880000	927000	988000	1059000	1150000	1271000	1401000	1462000	1457000	1481000	1535000
Weighted average shares outstanding – diluted	750000	778000	812000	840000	881000	929000	990000	1061000	1152000	1273000	1403000	1464000	1472000	1510000	1566000
Year end shares outstanding	731000	763000	801000	830000	866000	910000	960000	1030000	1110000	1241000	1354000	1459000	1470000	1458000	1524500
Net earnings (loss) per common share – basic	7.77	5.49	2.84	4.09	3.48	2.73	2.71	2.14	1.69	1.43	1.42	1.21	1.51	1.9	2.02
Net earnings (loss) per common share – diluted	7.75	5.49	2.84	4.09	3.47	2.73	2.71	2.14	1.69	1.43	1.42	1.21	1.49	1.86	1.99
Cash dividends per share	2.3	2.13	1.85	1.58	1.33	1.07	0.87	0.7	0.62	0.53	0.42	0.355	0.335	0.29	0.18
Number of full time employees	220000	200000	190000	200000	190000	180000	175000	167000	160000	161000	161000	166000	164000	160000	157000
Number of part time employees	120000	120000	110000	110000	100000	90000	91000	95000	85000	87000	73000	73000	65000	56000	53000
Number of common stockholders	21657	22129	22326	22926	23575	24337	25065	25932	27259	28727	29962	31041	31701	31941	31770
Foreign currency translation adjustments	78000	94000	-221000	251000	154000	-291000	–	–	–	–	–	–	–	–	–
As Reported Annual Retained Earnings
Report Date	01/29/2021	01/31/2020	02/01/2019	02/02/2018	02/03/2017	01/29/2016	01/30/2015	01/31/2014	02/01/2013	02/03/2012	01/28/2011	01/29/2010	01/30/2009	02/01/2008	02/02/2007
Currency	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD
Audit Status	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified
Consolidated	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Scale	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands
Previous retained earnings (accumulated deficit)	1727000	3452000	5425000	6241000	7593000	9591000	11355000	13224000	15852000	17371000	18307000	17049000	15345000	14860000	12191000
Cumulative effect of accounting change	–	-263000	33000	–	–	–	–	–	–	–	–	–	–	-8000	–
Cash dividends declared	1724000	1653000	1500000	1324000	1169000	991000	858000	741000	708000	672000	588000	522000	491000	428000	276000
Repurchases of common stock	4721000	4090000	2820000	2939000	3274000	3553000	3604000	3414000	3879000	2686000	2358000	3000	–	1888000	160000
Retained earnings (accumulated deficit)	1117000	1727000	3452000	5425000	6241000	7593000	9591000	11355000	13224000	15852000	17371000	18307000	17049000	15345000	14860000
As Reported Annual Cash Flow
Report Date	01/29/2021	01/31/2020	02/01/2019	02/02/2018	02/03/2017	01/29/2016	01/30/2015	01/31/2014	02/01/2013	02/03/2012	01/28/2011	01/29/2010	01/30/2009	02/01/2008	02/02/2007
Currency	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD
Audit Status	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified
Consolidated	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Scale	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands
Net earnings (loss)	5835000	4281000	2314000	3447000	3093000	2546000	2698000	2286000	1959000	1839000	2010000	1783000	2195000	2809000	3105000
Depreciation & amortization	1594000	1410000	1607000	1540000	1590000	1587000	1586000	1562000	1623000	1579000	1684000	1733000	1667000	1464000	1237000
Noncash lease expense	479000	468000	–	–	–	–	–	–	–	–	–	–	–	–	–
Deferred income taxes	-108000	177000	-151000	53000	28000	-68000	-124000	-162000	-140000	54000	-133000	-123000	69000	2000	-6000
Loss (gain) on disposition or writedown (write-back) of fixed & other assets	–	–	–	–	–	–	–	–	–	–	–	–	–	51000	23000
Loss (gain) on property & other assets – net	139000	117000	630000	40000	143000	33000	25000	64000	83000	456000	103000	193000	89000	–	–
Impairment of goodwill	–	–	952000	–	–	–	–	–	–	–	–	–	–	–	–
Loss (gain) on extinguishment of debt	1060000	–	–	464000	–	–	–	–	–	–	–	–	–	–	–
Loss on equity method investments	–	–	–	–	–	591000	57000	52000	48000	–	–	–	–	–	–
Loss (gain) on cost method & equity method investments	–	12000	9000	-82000	302000	–	–	–	–	–	–	–	–	–	–
Loss on redemption of long-term debt	–	–	–	–	–	–	–	–	–	–	–	–	8000	–	–
Transaction loss from exchange rate changes	–	–	–	–	–	–	–	–	–	–	–	–	3000	–	–
Share-based payment expense	155000	98000	74000	99000	90000	117000	119000	100000	100000	107000	115000	102000	95000	99000	62000
Merchandise inventory – net	-2967000	-600000	-1289000	-791000	-178000	-582000	170000	-396000	-244000	-33000	-64000	-28000	-611000	-464000	-509000
Other operating assets	326000	-376000	-110000	250000	-183000	-34000	83000	-5000	-87000	137000	-142000	7000	31000	-64000	-135000
Accounts payable	3211000	-637000	1720000	-92000	653000	524000	127000	291000	303000	-5000	60000	175000	402000	185000	692000
Deferred revenue	512000	–	–	–	–	–	–	–	–	–	–	–	–	–	–
Other operating liabilities	813000	-654000	437000	137000	79000	70000	188000	319000	117000	215000	219000	212000	174000	265000	33000
Net cash flows from operating activities	11049000	4296000	6193000	5065000	5617000	4784000	4929000	4111000	3762000	4349000	3852000	4054000	4122000	4347000	4502000
Purchases of short-term investments	–	–	–	–	–	–	–	–	–	–	–	-344000	-210000	-920000	-284000
Purchases of investments	-3094000	-743000	-1373000	-981000	-1192000	-934000	-820000	-759000	-1444000	-1433000	-2605000	–	–	–	–
Proceeds from sale or maturity of investments	2926000	695000	1393000	1114000	1254000	884000	805000	709000	1837000	2120000	1822000	–	–	–	–
Proceeds from sale or maturity of short-term investments	–	–	–	–	–	–	–	–	–	–	–	624000	431000	1183000	572000
Purchases of long-term investments	–	–	–	–	–	–	–	–	–	–	–	-1483000	-1148000	-1588000	-558000
Proceeds from sale or maturity of long-term investments	–	–	–	–	–	–	–	–	–	–	–	1160000	994000	1162000	415000
Decrease (increase) in other long-term assets	–	–	–	–	–	–	–	–	–	–	-97000	-62000	-56000	-7000	-16000
Property acquired	–	–	–	–	–	–	–	–	–	-1829000	-1329000	-1799000	-3266000	-4010000	-3916000
Capital expenditures	-1791000	-1484000	-1174000	-1123000	-1167000	-1197000	-880000	-940000	-1211000	–	–	–	–	–	–
Contributions to equity method investments – net	–	–	–	–	–	-125000	-241000	-173000	-219000	-232000	–	–	–	–	–
Proceeds from sale of property & other long-term assets	90000	163000	76000	45000	37000	57000	52000	75000	130000	52000	25000	18000	29000	57000	72000
Purchases of derivative instruments	–	–	–	–	-103000	–	–	–	–	–	–	–	–	–	–
Proceeds from settlement of derivative instruments	–	–	–	–	179000	–	–	–	–	–	–	–	–	–	–
Acquisition of business – net	–	–	–	-509000	-2356000	–	–	-203000	–	–	–	–	–	–	–
Other investing activities – net	-25000	–	-2000	13000	-13000	-28000	-4000	5000	4000	-115000	–	–	–	–	–
Net cash flows from investing activities	-1894000	-1369000	-1080000	-1441000	-3361000	-1343000	-1088000	-1286000	-903000	-1437000	-2184000	-1886000	-3226000	-4123000	-3715000
Net change in commercial paper	-941000	220000	–	–	–	–	–	–	–	–	–	–	–	–	–
Net change in short-term borrowings	–	–	-415000	625000	466000	43000	-386000	386000	–	–	–	-1007000	-57000	1041000	23000
Net proceeds from issuance of debt	7929000	3972000	–	2968000	3267000	1718000	1239000	985000	1984000	993000	1985000	10000	15000	1296000	989000
Repayment of debt	-5618000	-1113000	-326000	-2849000	-1173000	-552000	-48000	-47000	-591000	-37000	-552000	-37000	-573000	-96000	-33000
Proceeds from issuance of common stock under share-based payment plans	152000	118000	114000	139000	139000	125000	137000	165000	349000	100000	104000	75000	76000	80000	76000
Proceeds from issuance of common stock from stock options exercised	–	–	–	–	–	–	–	–	–	–	–	53000	98000	69000	100000
Cash dividend payments	-1704000	-1618000	-1455000	-1288000	-1121000	-957000	-822000	-733000	-704000	-647000	-571000	-391000	-491000	-428000	-276000
Repurchases of common stock	-4971000	-4313000	-3037000	-3192000	-3595000	-3925000	-3905000	-3710000	-4393000	-2937000	-2618000	-504000	-8000	-2275000	-1737000
Excess tax benefits of share-based payments	–	–	–	–	–	–	–	–	–	–	1000	–	1000	6000	12000
Other financing activities – net	-38000	-1000	-5000	-10000	-75000	55000	24000	-15000	22000	-21000	–	–	–	–	–
Net cash flows from financing activities	-5191000	-2735000	-5124000	-3607000	-2092000	-3493000	-3761000	-2969000	-3333000	-2549000	-1651000	-1801000	-939000	-307000	-846000
Effect of exchange rate changes on cash	10000	1000	-12000	13000	-11000	-9000	-5000	-6000	1000	-1000	3000	20000	7000	–	–
Net increase (decrease) in cash & cash equivalents, including cash classified within current assets held for sale	3974000	193000	-23000	–	–	–	–	–	–	–	–	–	–	–	–
Net increase (decrease) in cash & cash equivalents	3974000	205000	-77000	30000	153000	-61000	75000	-150000	-473000	362000	20000	387000	-36000	-83000	-59000
Less: net increase (decrease) in cash classified within current assets held for sale	–	12000	-54000	–	–	–	–	–	–	–	–	–	–	–	–
Cash & cash equivalents, beginning of year	716000	511000	588000	558000	405000	466000	391000	541000	1014000	652000	632000	245000	281000	364000	423000
Cash & cash equivalents, end of year	4690000	716000	511000	588000	558000	405000	466000	391000	541000	1014000	652000	632000	245000	281000	364000
Cash paid for interest, net of amount capitalized	824000	671000	635000	654000	619000	535000	504000	454000	444000	361000	319000	314000	309000	198000	179000
Cash paid for income taxes, net	1588000	1423000	1316000	1673000	2217000	2055000	1534000	1505000	1404000	914000	1590000	1157000	1138000	1725000	2031000

standardized

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Lowe's Companies Inc (NYS: LOW)
Exchange rate used is that of the Year End reported date
Standardized Annual Balance Sheet
Report Date	1/29/21	01/31/2020	02/01/2019	02/02/2018	02/03/2017	01/29/2016	01/30/2015	01/31/2014	02/01/2013	02/03/2012	01/28/2011	01/29/2010	01/30/2009	02/01/2008	02/02/2007
Currency	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD
Audit Status	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified
Consolidated	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Scale	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands
Cash & Equivalents	4690000	716000	511000	588000	558000	405000	466000	391000	541000	1014000	652000	632000	245000	281000	364000
Short Term Investments	506000	160000	218000	102000	100000	307000	125000	185000	125000	286000	471000	425000	416000	249000	432000
Cash & Equivs & ST Investments	5196000	876000	729000	690000	658000	712000	591000	576000	666000	1300000	1123000	1057000	661000	530000	796000
Receivables (ST)	–	–	–	–	–	–	0	0	0	0	0	0	0	0	0
Inventories	16193000	13179000	12561000	11393000	10458000	9458000	8911000	9127000	8600000	8355000	8321000	8249000	8209000	7611000	7144000
Current Tax Assets	–	–	–	–	–	–	230000	252000	217000	183000	193000	208000	166000	247000	161000
Other Current Assets	937000	1263000	938000	689000	884000	391000	348000	341000	301000	234000	330000	218000	215000	298000	213000
Total Current Assets	22326000	15318000	14228000	12772000	12000000	10561000	10080000	10296000	9784000	10072000	9967000	9732000	9251000	8686000	8314000
Gross Property Plant & Equip	36702000	35945000	35863000	36940000	36918000	35913000	35443000	35074000	34666000	34332000	33345000	32268000	31477000	28836000	25104000
Accumulated Depreciation	17547000	17276000	17431000	17219000	16969000	16336000	15409000	14240000	13189000	12362000	11256000	9769000	8755000	7475000	6133000
Net Property Plant & Equip	19155000	18669000	18432000	19721000	19949000	19577000	20034000	20834000	21477000	21970000	22089000	22499000	22722000	21361000	18971000
Long Term Investments	200000	372000	256000	408000	366000	222000	354000	279000	271000	504000	1008000	277000	253000	509000	165000
Intangible Assets	–	303000	303000	1307000	1082000	–	–	–	–	–	–	–	–	–	–
Deferred LT Assets	340000	216000	294000	168000	222000	241000	–	–	–	–	–	–	–	–	–
Other Assets	4714000	4593000	995000	915000	789000	665000	1359000	1323000	1134000	1013000	635000	497000	460000	313000	317000
Total Assets	46735000	39471000	34508000	35291000	34408000	31266000	31827000	32732000	32666000	33559000	33699000	33005000	32686000	30869000	27767000
Accounts Payable & Accrued Exps	13044000	9088000	9613000	7930000	8047000	6998000	6408000	6253000	5753000	5367000	5018000	4864000	4543000	4137000	3896000
Accounts Payable	10884000	7659000	8279000	6590000	6651000	5633000	5124000	5008000	4657000	4352000	4351000	4287000	4109000	3713000	3524000
Accrued Expenses	2160000	1429000	1334000	1340000	1396000	1365000	1284000	1245000	1096000	1015000	667000	577000	434000	424000	372000
Current Debt	1112000	2538000	1832000	1431000	1305000	1104000	552000	435000	47000	592000	36000	552000	1021000	1104000	111000
Other Current Liabilities	4574000	3556000	3052000	2735000	2622000	2390000	2388000	2188000	1908000	1932000	2065000	1939000	2458000	2510000	2532000
Total Current Liabilities	18730000	15182000	14497000	12096000	11974000	10492000	9348000	8876000	7708000	7891000	7119000	7355000	8022000	7751000	6539000
LT Debt & Leases	20668000	16768000	14391000	15564000	14394000	11545000	10815000	10086000	9030000	7035000	6537000	4528000	5039000	5576000	4325000
Deferred LT Liabilities	1019000	894000	827000	803000	763000	729000	827000	1021000	1170000	1235000	1098000	598000	660000	670000	735000
Minority Interests	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Other Liabilities	4881000	4655000	1149000	955000	843000	846000	869000	896000	901000	865000	833000	1455000	910000	774000	443000
Total Liabilities	45298000	37499000	30864000	29418000	27974000	23612000	21859000	20879000	18809000	17026000	15587000	13936000	14631000	14771000	12042000
Common Share Capital	366000	381000	401000	415000	433000	455000	480000	515000	555000	621000	677000	729000	735000	729000	762000
Additional Paid-In Capital	90000	–	–	22000	–	–	–	–	26000	14000	11000	6000	277000	16000	102000
Retained Earnings	1117000	1727000	3452000	5425000	6241000	7593000	9591000	11355000	13224000	15852000	17371000	18307000	17049000	15345000	14860000
Accum Other Comprehensive Income	-136000	-136000	-209000	11000	-240000	-394000	-103000	-17000	52000	46000	53000	27000	-6000	8000	1000
Other Equity	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Total Equity	1437000	1972000	3644000	5873000	6434000	7654000	9968000	11853000	13857000	16533000	18112000	19069000	18055000	16098000	15725000
Total Liabilities & Equity	46735000	39471000	34508000	35291000	34408000	31266000	31827000	32732000	32666000	33559000	33699000	33005000	32686000	30869000	27767000
Standardized Annual Income Statement
Report Date	01/29/2021	01/31/2020	02/01/2019	02/02/2018	02/03/2017	01/29/2016	01/30/2015	01/31/2014	02/01/2013	02/03/2012	01/28/2011	01/29/2010	01/30/2009	02/01/2008	02/02/2007
Currency	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD
Audit Status	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified
Consolidated	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Scale	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands
Sales Revenue	89597000	72148000	71309000	68619000	65017000	59074000	56223000	53417000	50521000	50208000	48815000	47220000	48230000	48283000	46927000
Total Revenue	89597000	72148000	71309000	68619000	65017000	59074000	56223000	53417000	50521000	50208000	48815000	47220000	48230000	48283000	46927000
Direct Costs	60025000	49205000	48401000	45210000	42553000	38504000	36665000	34941000	33194000	32858000	31663000	30757000	31729000	31556000	30729000
Gross Profit	29572000	22943000	22908000	23409000	22464000	20570000	19558000	18476000	17327000	17350000	17152000	16463000	16501000	16727000	16198000
Selling General & Admin	18526000	15367000	17413000	15376000	15129000	14115000	13281000	12865000	12244000	12593000	12006000	11688000	11074000	10515000	9738000
Depreciation & Amortization	1399000	1262000	1477000	1447000	1489000	1484000	1485000	1462000	1523000	1480000	1586000	1614000	1539000	1366000	1162000
Other Operating Expense	0	0	0	0	0	0	0	0	0	0	0	49000	102000	141000	146000
Total Indirect Operating Costs	19925000	16629000	18890000	16823000	16618000	15599000	14766000	14327000	13767000	14073000	13592000	13351000	12715000	12022000	11046000
Operating Income	9647000	6314000	4018000	6586000	5846000	4971000	4792000	4149000	3560000	3277000	3560000	3112000	3786000	4705000	5152000
Interest Income	-848000	-691000	-624000	-633000	-645000	-552000	-516000	-476000	-423000	-371000	-332000	-287000	-280000	-194000	-154000
Other Non-Operating Income	-1060000	0	0	-464000	0	0	0	0	0	0	0	0	0	0	0
Total Non-Operating Income	-1908000	-691000	-624000	-1097000	-645000	-552000	-516000	-476000	-423000	-371000	-332000	-287000	-280000	-194000	-154000
Earnings Before Tax	7739000	5623000	3394000	5489000	5201000	4419000	4276000	3673000	3137000	2906000	3228000	2825000	3506000	4511000	4998000
Taxation	1904000	1342000	1080000	2042000	2108000	1873000	1578000	1387000	1178000	1067000	1218000	1042000	1311000	1702000	1893000
Extraordinary Items	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Accounting Changes	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Net Income	5835000	4281000	2314000	3447000	3093000	2546000	2698000	2286000	1959000	1839000	2010000	1783000	2195000	2809000	3105000
Preference Dividends & Similar	-24000	-13000	-7000	-11000	-29000	-12000	-16000	-16000	-14000	-15000	-17000	-13000	0	0	0
Net Income to Common	5811000	4268000	2307000	3436000	3062000	2534000	2682000	2270000	1945000	1824000	1993000	1770000	2195000	2809000	3105000
Average Shares Basic	748000	777000	811000	839000	880000	927000	988000	1059000	1150000	1271000	1401000	1462000	1457000	1481000	1535000
EPS Net Basic	7.77	5.49	2.84	4.09	3.48	2.73	2.71	2.14	1.69	1.43	1.42	1.21	1.51	1.9	2.02
EPS Continuing Basic	7.77	5.49	2.84	4.09	3.48	2.73	2.71	2.14	1.69	1.43	1.42	1.21	1.51	1.9	2.02
Average Shares Diluted	750000	778000	812000	840000	881000	929000	990000	1061000	1152000	1273000	1403000	1464000	1472000	1510000	1566000
EPS Net Diluted	7.75	5.49	2.84	4.09	3.47	2.73	2.71	2.14	1.69	1.43	1.42	1.21	1.49	1.86	1.99
EPS Continuing Diluted	7.75	5.49	2.84	4.09	3.47	2.73	2.71	2.14	1.69	1.43	1.42	1.21	1.49	1.86	1.99
Shares Outstanding	731000	763000	801000	830000	866000	910000	960000	1030000	1110000	1241000	1354000	1459000	1470000	1458000	1524500
Standardized Annual Retained Earnings
Report Date	01/29/2021	01/31/2020	02/01/2019	02/02/2018	02/03/2017	01/29/2016	01/30/2015	01/31/2014	02/01/2013	02/03/2012	01/28/2011	01/29/2010	01/30/2009	02/01/2008	02/02/2007
Currency	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD
Audit Status	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified
Consolidated	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Scale	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands
Retained Earnings at Start	1727000	3452000	5425000	6241000	7593000	9591000	11355000	13224000	15852000	17371000	18307000	17049000	15345000	14860000	12191000
Retained Earnings at End	1117000	1727000	3452000	5425000	6241000	7593000	9591000	11355000	13224000	15852000	17371000	18307000	17049000	15345000	14860000
Standardized Annual Cash Flows
Report Date	01/29/2021	01/31/2020	02/01/2019	02/02/2018	02/03/2017	01/29/2016	01/30/2015	01/31/2014	02/01/2013	02/03/2012	01/28/2011	01/29/2010	01/30/2009	02/01/2008	02/02/2007
Currency	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD
Audit Status	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified
Consolidated	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Scale	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands
Net Income	5835000	4281000	2314000	3447000	3093000	2546000	2698000	2286000	1959000	1839000	2010000	1783000	2195000	2809000	3105000
Adjustments from Inc to Cash	3319000	2282000	3121000	2114000	2153000	2260000	1663000	1616000	1714000	2196000	1769000	1905000	1931000	1616000	1316000
Change in Working Capital	1895000	-2267000	758000	-496000	371000	-22000	568000	209000	89000	314000	73000	366000	-4000	-78000	81000
Cash Flow from Operations	11049000	4296000	6193000	5065000	5617000	4784000	4929000	4111000	3762000	4349000	3852000	4054000	4122000	4347000	4502000
Purchase of Pty Plant & Equip	-1791000	-1484000	-1174000	-1123000	-1167000	-1197000	-880000	-940000	-1211000	-1829000	-1329000	-1799000	-3266000	-4010000	-3916000
Purchase of Investments	-3094000	-743000	-1373000	-981000	-1192000	-1059000	-1061000	-932000	-1663000	-1665000	-2605000	-1827000	-1358000	-2508000	-842000
Disposal of Investments	2926000	695000	1393000	1114000	1254000	884000	805000	709000	1837000	2120000	1822000	1784000	1425000	2345000	987000
Change in Business Activities	–	–	–	-509000	-2356000	–	–	-203000	–	–	–	–	–	–	–
Other Investing Cash Flows	65000	163000	74000	58000	100000	29000	48000	80000	134000	-63000	-72000	-44000	-27000	50000	56000
Cash Flow from Investing	-1894000	-1369000	-1080000	-1441000	-3361000	-1343000	-1088000	-1286000	-903000	-1437000	-2184000	-1886000	-3226000	-4123000	-3715000
Change in ST Debt	-941000	220000	-415000	625000	466000	43000	-386000	386000	–	–	–	-1007000	-57000	1041000	23000
Change in LT Debt	2311000	2859000	-326000	119000	2094000	1166000	1191000	938000	1393000	956000	1433000	-27000	-558000	1200000	956000
Change in Equity	-4819000	-4195000	-2923000	-3053000	-3456000	-3800000	-3768000	-3545000	-4044000	-2837000	-2513000	-376000	167000	-2120000	-1549000
Payment of Dividends	-1704000	-1618000	-1455000	-1288000	-1121000	-957000	-822000	-733000	-704000	-647000	-571000	-391000	-491000	-428000	-276000
Other Financing Cash Flows	-38000	-1000	-5000	-10000	-75000	55000	24000	-15000	22000	-21000	0	0	0	0	0
Cash Flow from Financing	-5191000	-2735000	-5124000	-3607000	-2092000	-3493000	-3761000	-2969000	-3333000	-2549000	-1651000	-1801000	-939000	-307000	-846000
Effect of Exchange Rate	10000	1000	-12000	13000	-11000	-9000	-5000	-6000	1000	-1000	3000	20000	7000	–	–
Cash from Discontinued Ops	–	12000	-54000	–	–	–	–	–	–	–	–	–	–	–	–
Change in Cash	3974000	205000	-77000	30000	153000	-61000	75000	-150000	-473000	362000	20000	387000	-36000	-83000	-59000
Opening Cash	716000	511000	588000	558000	405000	466000	391000	541000	1014000	652000	632000	245000	281000	364000	423000
Closing Cash	4690000	716000	511000	588000	558000	405000	466000	391000	541000	1014000	652000	632000	245000	281000	364000
Depn & Amortn (CF)	1594000	1410000	1607000	1540000	1590000	1587000	1586000	1562000	1623000	1579000	1684000	1733000	1667000	1464000	1237000
Net Purch of Pty Plant & Equip	-1791000	-1484000	-1174000	-1123000	-1167000	-1197000	-880000	-940000	-1211000	-1829000	-1329000	-1799000	-3266000	-4010000	-3916000
Standardized Annual CS Balance Sheet
Report Date	01/29/2021	01/31/2020	02/01/2019	02/02/2018	02/03/2017	01/29/2016	01/30/2015	01/31/2014	02/01/2013	02/03/2012	01/28/2011	01/29/2010	01/30/2009	02/01/2008	02/02/2007
Currency	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD
Audit Status	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified
Consolidated	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Scale	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands
Cash & Equivalents %TA	10.035	1.814	1.481	1.666	1.622	1.295	1.464	1.195	1.656	3.022	1.935	1.915	0.750	0.910	1.311
Short Term Investments %TA	1.083	0.405	0.632	0.289	0.291	0.982	0.393	0.565	0.383	0.852	1.398	1.288	1.273	0.807	1.556
Cash & Equivs & ST Investments %TA	11.118	2.219	2.113	1.955	1.912	2.277	1.857	1.760	2.039	3.874	3.332	3.203	2.022	1.717	2.867
Receivables (ST) %TA	–	–	–	–	–	–	0	0	0	0	0	0	0	0	0
Inventories %TA	34.649	33.389	36.400	32.283	30.394	30.250	27.998	27.884	26.327	24.896	24.692	24.993	25.115	24.656	25.728
Current Tax Assets %TA	–	–	–	–	–	–	0.723	0.770	0.664	0.545	0.573	0.630	0.508	0.800	0.580
Other Current Assets %TA	2.005	3.200	2.718	1.952	2.569	1.251	1.093	1.042	0.921	0.697	0.979	0.661	0.658	0.965	0.767
Total Current Assets %TA	47.771	38.808	41.231	36.191	34.876	33.778	31.671	31.455	29.952	30.013	29.577	29.486	28.303	28.138	29.942
Gross Property Plant & Equip %TA	78.532	91.067	103.927	104.673	107.295	114.863	111.361	107.155	106.123	102.303	98.950	97.767	96.301	93.414	90.409
Accumulated Depreciation %TA	37.546	43.769	50.513	48.791	49.317	52.248	48.415	43.505	40.375	36.837	33.402	29.599	26.785	24.215	22.087
Net Property Plant & Equip %TA	40.986	47.298	53.414	55.881	57.978	62.614	62.947	63.650	65.747	65.467	65.548	68.168	69.516	69.199	68.322
LT Investments %TA	0.428	0.942	0.742	1.156	1.064	0.710	1.112	0.852	0.830	1.502	2.991	0.839	0.774	1.649	0.594
Intangible Assets %TA	–	0.768	0.878	3.703	3.145	–	–	–	–	–	–	–	–	–	–
Deferred LT Assets %TA	0.728	0.547	0.852	0.476	0.645	0.771	–	–	–	–	–	–	–	–	–
Other Assets %TA	10.087	11.636	2.883	2.593	2.293	2.127	4.270	4.042	3.471	3.019	1.884	1.506	1.407	1.014	1.142
Total Assets as 100%	100	100	100	100	100	100	100	100	100	100	100	100	100	100	100
Accounts Payable & Accrued Exps %TA	27.911	23.024	27.857	22.470	23.387	22.382	20.134	19.104	17.612	15.993	14.891	14.737	13.899	13.402	14.031
Accounts Payable %TA	23.289	19.404	23.992	18.673	19.330	18.016	16.100	15.300	14.256	12.968	12.911	12.989	12.571	12.028	12.691
Accrued Expenses %TA	4.622	3.620	3.866	3.797	4.057	4.366	4.034	3.804	3.355	3.025	1.979	1.748	1.328	1.374	1.340
Current Debt %TA	2.379	6.430	5.309	4.055	3.793	3.531	1.734	1.329	0.144	1.764	0.107	1.672	3.124	3.576	0.400
Other Current Liabilities %TA	9.787	9.009	8.844	7.750	7.620	7.644	7.503	6.685	5.841	5.757	6.128	5.875	7.520	8.131	9.119
Total Current Liabilities %TA	40.077	38.464	42.011	34.275	34.800	33.557	29.371	27.117	23.596	23.514	21.125	22.285	24.543	25.109	23.550
LT Debt & Lease %TA	44.224	42.482	41.703	44.102	41.833	36.925	33.981	30.814	27.643	20.963	19.398	13.719	15.416	18.063	15.576
Deferred LT Liabilities %TA	2.180	2.265	2.397	2.275	2.218	2.332	2.598	3.119	3.582	3.680	3.258	1.812	2.019	2.170	2.647
Minority Interests %TA	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Other Liabilities %TA	10.444	11.793	3.330	2.706	2.450	2.706	2.730	2.737	2.758	2.578	2.472	4.408	2.784	2.507	1.595
Total Liabilities %TA	96.925	95.004	89.440	83.358	81.301	75.520	68.681	63.788	57.580	50.735	46.254	42.224	44.762	47.851	43.368
Common Share Capital %TA	0.783	0.965	1.162	1.176	1.258	1.455	1.508	1.573	1.699	1.850	2.009	2.209	2.249	2.362	2.744
Additional Paid-In Capital %TA	0.193	–	–	0.062	–	–	–	–	0.080	0.042	0.033	0.018	0.847	0.052	0.367
Retained Earnings %TA	2.390	4.375	10.003	15.372	18.138	24.285	30.135	34.691	40.482	47.236	51.548	55.467	52.160	49.710	53.517
Accum Other Comprehens Income %TA	-0.291	-0.345	-0.606	0.031	-0.698	-1.260	-0.324	-0.052	0.159	0.137	0.157	0.082	-0.018	0.026	0.004
Other Equity %TA	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Total Equity %TA	3.075	4.996	10.560	16.642	18.699	24.480	31.319	36.212	42.420	49.265	53.746	57.776	55.238	52.149	56.632
Total Liabilities & Equity %TA	100	100	100	100	100	100	100	100	100	100	100	100	100	100	100
Standardized Annual CS Income Statement
Report Date	01/29/2021	01/31/2020	02/01/2019	02/02/2018	02/03/2017	01/29/2016	01/30/2015	01/31/2014	02/01/2013	02/03/2012	01/28/2011	01/29/2010	01/30/2009	02/01/2008	02/02/2007
Currency	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD
Audit Status	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified	Not Qualified
Consolidated	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Scale	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands	Thousands
Sales Revenue %TR	100	100	100	100	100	100	100	100	100	100	100	100	100	100	100
Total Revenue (100% TR)	100	100	100	100	100	100	100	100	100	100	100	100	100	100	100
Direct Costs %TR	66.994	68.200	67.875	65.886	65.449	65.179	65.214	65.412	65.703	65.444	64.863	65.136	65.787	65.356	65.483
Gross Profit %TR	33.006	31.800	32.125	34.114	34.551	34.821	34.786	34.588	34.297	34.556	35.137	34.864	34.213	34.644	34.517
Selling General & Admin %TR	20.677	21.299	24.419	22.408	23.269	23.894	23.622	24.084	24.235	25.082	24.595	24.752	22.961	21.778	20.751
Depreciation & Amortization %TR	1.561	1.749	2.071	2.109	2.290	2.512	2.641	2.737	3.015	2.948	3.249	3.418	3.191	2.829	2.476
Other Operating Expense %TR	0	0	0	0	0	0	0	0	0	0	0	0.104	0.211	0.292	0.311
Total Indirect Operating Costs %TR	22.238	23.048	26.490	24.517	25.559	26.406	26.263	26.821	27.250	28.029	27.844	28.274	26.363	24.899	23.539
Operating Income %TR	10.767	8.751	5.635	9.598	8.991	8.415	8.523	7.767	7.047	6.527	7.293	6.590	7.850	9.745	10.979
Interest Income %TR	-0.946	-0.958	-0.875	-0.922	-0.992	-0.934	-0.918	-0.891	-0.837	-0.739	-0.680	-0.608	-0.581	-0.402	-0.328
Other Non-Operating Income %TR	-1.183	0	0	-0.676	0	0	0	0	0	0	0	0	0	0	0
Total Non-Operating Income %TR	-2.130	-0.958	-0.875	-1.599	-0.992	-0.934	-0.918	-0.891	-0.837	-0.739	-0.680	-0.608	-0.581	-0.402	-0.328
Earnings Before Tax %TR	8.638	7.794	4.760	7.999	7.999	7.480	7.605	6.876	6.209	5.788	6.613	5.983	7.269	9.343	10.651
Taxation %TR	2.125	1.860	1.515	2.976	3.242	3.171	2.807	2.597	2.332	2.125	2.495	2.207	2.718	3.525	4.034
Extraordinary Items %TR	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Accounting Changes %TR	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Net Income %TR	6.512	5.934	3.245	5.023	4.757	4.310	4.799	4.280	3.878	3.663	4.118	3.776	4.551	5.818	6.617
Preference Dividends & Similar %TR	-0.027	-0.018	-0.010	-0.016	-0.045	-0.020	-0.028	-0.030	-0.028	-0.030	-0.035	-0.028	0	0	0
Net Income to Common %TR	6.486	5.916	3.235	5.007	4.710	4.290	4.770	4.250	3.850	3.633	4.083	3.748	4.551	5.818	6.617

Ind ratios

Average of firm & competitors
Exchange rate used is that of the Year End reported date
Profitability Ratios	12/29/2019	12/30/2018	12/31/2017	01/01/2017	01/03/2016	12/28/2014	12/29/2013	12/30/2012	01/01/2012	01/02/2011	01/03/2010	12/28/2008	12/30/2007	12/31/2006	01/01/2006
ROA % (Net)	13.42	13.94	11.51	11.53	11.59	10.81	10.73	9.37	8.47	7.81	7.88	6.84	6.80	8.88	10.54
ROE % (Net)	4820.14	86.55	28.82	122.64	70.08	45.67	34.60	24.82	20.30	18.02	17.29	15.02	15.41	19.37	20.87
ROI % (Operating)	38.02	34.56	30.28	32.67	31.14	28.64	27.18	23.90	21.19	19.45	19.02	17.09	17.22	21.32	25.71
EBITDA Margin %	11.00	11.16	9.53	11.04	11.44	11.10	11.12	10.62	10.14	9.69	9.84	9.21	9.03	10.62	11.21
Calculated Tax Rate %	27.39	23.97	30.93	34.87	35.70	36.37	35.17	35.68	35.25	35.10	35.54	34.48	35.73	36.11	36.52
Revenue per Employee	256372.33	243377.00	243308.67	228163.67	221625.33	223031.67	219168.33	212485.00	211919.00	205198.00	207491.67	200611.67	208602.67	211477.00	219271.33
Liquidity Ratios	12/29/2019	12/30/2018	12/31/2017	01/01/2017	01/03/2016	12/28/2014	12/29/2013	12/30/2012	01/01/2012	01/02/2011	01/03/2010	12/28/2008	12/30/2007	12/31/2006	01/01/2006
Quick Ratio	0.34	0.16	0.15	0.19	0.19	0.21	0.19	0.19	0.21	0.23	0.18	0.20	0.14	0.12	0.21
Current Ratio	1.13	0.96	0.96	1.00	1.04	1.10	1.14	1.15	1.15	1.24	1.21	1.18	1.08	1.03	1.19
Net Current Assets % TA	4.73	-1.21	-1.25	-0.38	1.26	2.84	3.81	3.84	3.34	5.14	4.39	3.87	1.73	0.27	4.22
Debt Management	12/29/2019	12/30/2018	12/31/2017	01/01/2017	01/03/2016	12/28/2014	12/29/2013	12/30/2012	01/01/2012	01/02/2011	01/03/2010	12/28/2008	12/30/2007	12/31/2006	01/01/2006
LT Debt to Equity	8.60	4.57	2.32	6.60	2.65	1.79	1.14	0.87	0.57	0.56	0.49	0.40	0.45	0.50	0.42
Total Debt to Equity	9.02	5.26	2.63	7.36	2.83	1.88	1.20	0.94	0.66	0.60	0.54	0.45	0.54	0.62	0.46
Interest Coverage	11.91	10.57	10.90	11.57	11.15	11.47	14.03	11.32	12.05	10.79	11.26	9.80	10.40	16.04	24.45
Asset Management	12/29/2019	12/30/2018	12/31/2017	01/01/2017	01/03/2016	12/28/2014	12/29/2013	12/30/2012	01/01/2012	01/02/2011	01/03/2010	12/28/2008	12/30/2007	12/31/2006	01/01/2006
Total Asset Turnover	2.18	2.19	2.29	2.25	2.20	2.14	2.07	1.97	1.90	1.87	1.85	1.83	1.89	1.88	2.03
Receivables Turnover	69.55	69.04	70.62	69.12	66.49	65.19	65.04	63.72	64.69	70.83	78.97	84.99	85.55	75.31	1795.87
Inventory Turnover	6.36	5.94	6.04	6.00	5.88	5.78	5.69	5.58	5.64	5.68	5.73	5.65	5.67	5.59	5.83
Accounts Payable Turnover	11.65	11.48	11.62	12.01	12.18	12.63	12.77	12.62	12.72	12.95	12.91	12.92	13.19	12.66	13.82
Accrued Expenses Turnover	34.29	34.82	35.06	33.65	32.05	31.78	31.69	31.57	32.00	35.59	41.49	46.08	53.48	56.60	57.14
Property Plant & Equip Turnover	5.33	4.60	4.46	4.24	4.00	3.75	3.54	3.34	3.18	3.08	3.00	2.96	3.06	3.15	3.51
Cash & Equivalents Turnover	33.55	78.47	80.27	75.51	78.33	78.38	78.81	71.31	54.43	59.72	66.91	76.72	131.73	118.10	100.31
Per Share	12/29/2019	12/30/2018	12/31/2017	01/01/2017	01/03/2016	12/28/2014	12/29/2013	12/30/2012	01/01/2012	01/02/2011	01/03/2010	12/28/2008	12/30/2007	12/31/2006	01/01/2006
Cash Flow per Share	15.04	9.00	9.47	8.58	8.13	7.02	6.67	5.46	5.14	4.88	4.01	4.21	4.00	3.67	3.84
Book Value per Share	11.24	8.69	9.35	11.57	12.18	12.97	14.24	14.72	15.83	15.27	14.84	14.39	13.13	12.59	12.64

charts for ratios

Lowe's Companies Inc (NYS: LOW)
Exchange rate used is that of the Year End reported date
Profitability Ratios	Jan-21	Jan-20	Feb-19	Feb-18	Feb-17	Jan-16	Jan-15	Jan-14	Feb-13	Feb-12	Jan-11	Jan-10	Jan-09	Feb-08	Feb-07
ROA % (Net)	13.57	11.61	6.65	9.92	9.3	8.09	8.38	7.01	5.93	5.38	6.04	5.4	6.93	9.61	12
ROE % (Net)	343.27	152.88	48.76	56.17	43.2	28.98	24.80	17.83	12.93	10.44	10.84	9.63	12.89	17.70	20.71
ROI % (Operating)	43.48	30.78	18.86	29.35	27.11	23.94	21.99	18.36	15.16	13.20	14.62	12.93	16.19	21.98	27.17
EBITDA Margin %	11.26	10.7	7.60	10.96	11.30	10.93	11.16	10.50	10.1	9	10.5	10.01	11.04	12.6	13.45
Calculated Tax Rate %	24.6	23.87	31.82	37.20	40.53	42.39	36.90	37.76	37.55	36.72	37.73	36.88	37.39	37.73	37.88
Revenue per Employee	264245	226082	238350	221960	220571	219394	211945	204442	206775	199177	209184	198116	211190	224147	224076
Liquidity Ratios	Jan-21	Jan-20	Feb-19	Feb-18	Feb-17	Jan-16	Jan-15	Jan-14	Feb-13	Feb-12	Jan-11	Jan-10	Jan-09	Feb-08	Feb-07
Quick Ratio	0.28	0.06	0.05	0.06	0.1	0.07	0.06	0.06	0.09	0.16	0.2	0.14	0.08	0.07	0.12
Current Ratio	1.19	1.01	0.98	1.06	1.00	1.01	1.08	1.16	1.27	1.3	1.40	1.32	1.2	1.12	1.27
Net Current Assets % TA	7.69	0.34	-0.78	1.92	0.1	0.22	2.3	4.34	6.36	6.50	8.45	7.2	3.76	3.03	6.39
Debt Management	Jan-21	Jan-20	Feb-19	Feb-18	Feb-17	Jan-16	Jan-15	Jan-14	Feb-13	Feb-12	Jan-11	Jan-10	Jan-09	Feb-08	Feb-07
LT Debt to Equity	14.38	8.5	3.95	2.65	2.24	1.51	1.08	0.85	0.65	0.4	0.36	0.24	0.28	0.35	0.28
Total Debt to Equity	15.16	9.79	4.45	2.89	2.44	1.65	1.14	0.89	0.66	0.46	0.4	0.27	0.34	0.41	0.28
Interest Coverage	11.38	9.14	6.44	10.40	9.06	9.01	9.29	9	8.42	8.83	10.72	10.84	13.52	24.25	33.45
Asset Management	Jan-21	Jan-20	Feb-19	Feb-18	Feb-17	Jan-16	Jan-15	Jan-14	Feb-13	Feb-12	Jan-11	Jan-10	Jan-09	Feb-08	Feb-07
Total Asset Turnover	2.08	1.96	2.05	1.97	1.95	1.9	1.75	1.64	1.53	1.47	1.47	1.44	1.52	1.65	1.79
Receivables Turnover	–	–	–	–	–	–	–	–	–	–	–	–	–	–	5228.44
Inventory Turnover	4.09	3.82	4.04	4.14	4.3	4.19	4.07	3.9	3.92	3.94	3.82	3.7	4.01	4.28	4.44
Accounts Payable Turnover	9.69	9.08	9.6	10.39	10.41	11.01	11.13	11.1	11.25	11.35	11.33	11.28	12.37	13.38	14.81
Accrued Expenses Turnover	50.07	52.37	53	50.30	46.34	44.72	44.58	45.76	48.00	58.7	78.70	93.67	112.73	121.65	118.23
Property Plant & Equip Turnover	4.75	3.90	3.75	3.5	3.24	2.99	2.76	2.53	2.33	2.24	2.20	2.09	2.19	2.40	2.66
Cash & Equivalents Turnover	33.2	117.92	130.13	120.08	132.9	136.02	131.57	114.94	65.16	59.30	76.2	107.98	183.89	150.13	119.58
Per Share	Jan-21	Jan-20	Feb-19	Feb-18	Feb-17	Jan-16	Jan-15	Jan-14	Feb-13	Feb-12	Jan-11	Jan-10	Jan-09	Feb-08	Feb-07
Cash Flow per Share	14.81	5.54	7.66	6.05	6.28	5.17	5.00	3.9	3.28	3.37	2.76	2.78	2.84	2.94	2.94
Book Value per Share	1.97	2.58	4.55	7.08	7.4	8.41	10.38	11.51	12.48	13.32	13.38	13.07	12.28	11.04	10.31

Profitability ratios

ROA % (Net) 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 13.57 11.61 6.65 9.92 9.27 8.09 8.3800000000000008 7.01 5.93 5.38 6.04 5.44 6.93 9.61 11.87 ROE % (Net) 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 343.27 152.88 48.76 56.17 43.2 28.98 24.8 17.829999999999998 12.93 10.44 10.84 9.6300000000000008 12.89 17.7 20.71 ROI % (Operating) 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 43.48 30.78 18.86 29.35 27.11 23.94 21.99 18.36 15.16 13.2 14.62 12.93 16.190000000000001 21.98 27.17 EBITDA Margin % 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 11.26 10.69 7.6 10.96 11.3 10.93 11.16 10.5 10.06 9.4700000000000006 10.54 10.01 11.04 12.57 13.45 Calculated Tax Rate % 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 24.6 23.87 31.82 37.200000000000003 40.53 42.39 36.9 37.76 37.549999999999997 36.72 37.72 9999999999997 36.880000000000003 37.39 37.729999999999997 37.880000000000003

Revenue per employee

Revenue per Employee 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 264245 226082 238350 221960 220571 219394 211945 204442 206775 199177 209184 198116 211190 224147 224076

Liquidity Ratios

Quick Ratio 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 0.28000000000000003 0.06 0.05 0.06 0.05 7.0000000000000007E-2 0.06 0.06 0.09 0.16 0.16 0.14000000000000001 0.08 7.0000000000000007E-2 0.12 Current Ratio 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 1.19 1.01 0.98 1.06 1 1.01 1.08 1.1599999999999999 1.27 1.28 1.4 1.32 1.1499999999999999 1.1200000000000001 1.27 Net Current Assets % TA 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115

Debt Management Ratios

LT Debt to Equity 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 14.38 8.5 3.95 2.65 2.2400000000000002 1.51 1.08 0.85 0.65 0.43 0.36 0.24 0.28000000000000003 0.35 0.28000000000000003 Total Debt to Equity 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 15.16 9.7899999999999991 4.45 2.89 2.44 1.65 1.1399999999999999 0.89 0.66 0.46 0.36 0.27 0.34 0.41 0.28000000000000003 Interest Coverage 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 11.38 9.14 6.44 10.4 9.06 9.01 9.2899999999999991 8.7200000000000006 8.42 8.83 10.72 10.84 13.52 24.25 33.450000000000003

Asset Management Ratios

Total Asset Turnover 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 2.08 1.96 2.0499999999999998 1.97 1.95 1.88 1.75 1.64 1.53 1.47 1.47 1.44 1.52 1.65 1.79 Property Plant & Equip Turnover 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 4.75 3.9 3.75 3.47 3.24 2.99 2.76 2.5299999999999998 2.33 2.2400000000000002 2.2000000000000002 2.09 2.19 2.4 2.66

Asset Management Ratios

Receivables Turnover 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5228.4399999999996 Inventory Turnover 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 4.09 3.82 4.04 4.1399999999999997 4.2699999999999996 4.1900000000000004 4.07 3.94 3.92 3.94 3.82 3.74 4.01 4.2 8 4.4400000000000004 Accounts Payable Turnover 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 9.69 9.08 9.6199999999999992 10.39 10.41 11.01 11.13 11.08 11.25 11.35 11.33 11.28 12.37 13.38 14.81 Accrued Expenses Turnover 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 50.07 52.37 53.48 50.3 46.34 44.72 44.58 45.76 48 58.73 78.7 93.67 112.73 121.65 118.23 Cash & Equivalents Turnover 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 33.24 117.92 130.13 120.08 132.85 136.02000000000001 131.57 114.94 65.16 59.3 76.239999999999995 107.98 183.89 150.13 119.58 Total Asset Turnover 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 2.08 1.96 2.0499999999999998 1.97 1.95 1.88 1.75 1.64 1.53 1.47 1.47 1.44 1.52 1.65 1.79 Property Plant & Equip Turnover 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 4.75 3.9 3.75 3.47 3.24 2.99 2.76 2.5299999999999998 2.33 2.2400000000000002 2.2000000000000002 2.09 2.19 2.4 2.66

Per Share data

Cash Flow per Share 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 14.81 5.54 7.66 6.05 6.28 5.17 5 3.89 3.28 3.37 2.76 2.78 2.84 2.94 2.94 Book Value per Share 44225 43861 43497 43133 42769 42398 42034 41670 41306 40942 40571 40207 39843 39479 39115 1.97 2.58 4.55 7.08 7.43 8.41 10.38 11.51 12.48 13.32 13.38 13.07 12.28 11.04 10.31

comparison

Ratio comparison
	01/29/2021	01/31/2021	01/31/2021	12/29/2019
Profitability Ratios	LOW	HD	WMT		Average
ROA % (Net)	13.57	21.18	5.51		13.42
ROE % (Net)	343.27	14099.83	17.32		4820.14
ROI % (Operating)	43.48	53.20	17.37		38.02
EBITDA Margin %	11.26	15.67	6.07		11.00
Calculated Tax Rate %	24.60	24.22	33.35		27.39
Revenue per Employee	264245	262427	242445		256372
Liquidity Ratios	LOW	HD	WMT		Average
Quick Ratio	0.28	0.47	0.26		0.34
Current Ratio	1.19	1.23	0.97		1.13
Net Current Assets % TA	7.69	7.52	-1.02		4.73
Debt Management	LOW	HD	WMT		Average
LT Debt to Equity	14.38	10.86	0.56		8.60
Total Debt to Equity	15.16	11.29	0.6		9.02
Interest Coverage	11.38	14.06	10.28		11.91
Asset Management	LOW	HD	WMT		Average
Total Asset Turnover	2.08	2.17	2.28		2.18
Receivables Turnover	–	51.97	87.13		69.55
Inventory Turnover	4.09	5.60	9.40		6.36
Accounts Payable Turnover	9.69	13.66	11.60		11.65
Accrued Expenses Turnover	50.07	27.32	25.49		34.29
Property Plant & Equip Turnover	4.75	5.58	5.65		5.33
Cash & Equivalents Turnover	33.24	26.42	40.99		33.55

Market value ratios

Current Market Multiples	LOW	HD	WMT
Market Cap/Earnings (TTM)	21.14	27.17	49.83
Market Cap/Equity (MRQ)	-110.5	418.71	4.42
Market Cap/Revenue (TTM)	1.83	2.93	0.7
Market Cap/EBIT (TTM)	14.78	19.4	26.04
Market Cap/EBITDA (TTM)	12.79	17.25	15.33
Enterprise Value/Earnings (TTM)	24.09	29.69	54.98			Obtained from
Enterprise Value/Equity (MRQ)	-125.9	457.55	4.88
Enterprise Value/Revenue (TTM)	2.08	3.21	0.77			D&B Hoovers
Enterprise Value/EBIT (TTM)	16.84	21.2	28.73			Annual Ratios
Enterprise Value/EBITDA (TTM)	14.57	18.85	16.91
Valuation Ratios	LOW	HD	WMT	Industry	Sector
P/E Ratio	22.38	27.72	50.59	25.51	37.31
Price/Revenue	1.94	3	0.71	2.52	2.24	Obtained from
Price/Book	–	418.71	4.88	400	6
Price to Cash Flow per Share	21.11	29.89	13.84	25.84	1.67	D&B Hoovers
Price to Free Cash Flow per Share	26.87	36.55	23.9	32.57	0	Ratio Comparisons

Analysis LOW

Report Date	Jan-21	Jan-20	Feb-19	Feb-18	Feb-17	Jan-16	Jan-15	Jan-14	Feb-13	Feb-12	Jan-11	Jan-10	Jan-09	Feb-08	Feb-07
Raw numbers
Total Assets	46735000	39471000	34508000	35291000	34408000	31266000	31827000	32732000	32666000	33559000	33699000	33005000	32686000	30869000	27767000
Total Equity	1437000	1972000	3644000	5873000	6434000	7654000	9968000	11853000	13857000	16533000	18112000	19069000	18055000	16098000	15725000
Total Revenue	89597000	72148000	71309000	68619000	65017000	59074000	56223000	53417000	50521000	50208000	48815000	47220000	48230000	48283000	46927000
Operating Income	9647000	6314000	4018000	6586000	5846000	4971000	4792000	4149000	3560000	3277000	3560000	3112000	3786000	4705000	5152000
Net Income	5835000	4281000	2314000	3447000	3093000	2546000	2698000	2286000	1959000	1839000	2010000	1783000	2195000	2809000	3105000
Shares Outstanding	731000	763000	801000	830000	866000	910000	960000	1030000	1110000	1241000	1354000	1459000	1470000	1458000	1524500
EPS Net Diluted	7.75	5.49	2.84	4.09	3.47	2.73	2.71	2.14	1.69	1.43	1.42	1.21	1.49	1.86	1.99
Cash dividends per share	2.30	2.13	1.85	1.58	1.33	1.07	0.87	0.70	0.62	0.53	0.42	0.36	0.34	0.29	0.18
Number of full time employees	220000	200000	190000	200000	190000	180000	175000	167000	160000	161000	161000	166000	164000	160000	157000
Cash Flow from Operations	11049000	4296000	6193000	5065000	5617000	4784000	4929000	4111000	3762000	4349000	3852000	4054000	4122000	4347000	4502000
Recent growth	Last year	Last 2 years	Last 3 years	Last 5 years	Last 7 years	Last 10 years
Total Assets	18.4%	16.4%	9.8%	6.3%	5.2%	3.3%
Total Equity	-27.1%	-37.2%	-37.5%	-25.9%	-26.0%	-22.4%
Total Revenue	24.2%	12.1%	9.3%	6.6%	7.7%	6.3%
Operating Income	52.8%	54.9%	13.6%	10.5%	12.8%	10.5%
Net Income	36.3%	58.8%	19.2%	13.5%	14.3%	11.2%
Shares Outstanding	-4.2%	-4.5%	-4.1%	-3.3%	-4.8%	-6.0%
EPS Net Diluted	41.2%	65.2%	23.7%	17.4%	20.2%	18.5%
Cash dividends per share	8.0%	11.5%	13.3%	11.6%	18.5%	18.5%
Number of full time employees	10.0%	7.6%	3.2%	3.0%	4.0%	3.2%
Cash Flow from Operations	157.2%	33.6%	29.7%	14.5%	15.2%	11.1%
Raw numbers													Growth Numbers
Data sorted for charts
1			4	5	6	7	8	9	10	11	12	13
	1		Total Assets	Total Equity	Total Revenue	Operating Income	Net Income	Shares Outstanding	EPS Net Diluted	Cash dividends per share	Number of full time employees	Cash Flow from Operations
														Total Assets	Total Equity	Total Revenue	Operating Income	Net Income	Shares Outstanding	EPS Net Diluted	Cash dividends per share	Number of full time employees	Cash Flow from Operations
Feb-07	16		27767000	15725000	46927000	5152000	3105000	1524500	1.99	0.18	157000	4502000	Feb-07
Feb-08	15		30869000	16098000	48283000	4705000	2809000	1458000	1.86	0.29	160000	4347000	Feb-08	11.2%	2.4%	2.9%	-8.7%	-9.5%	-4.4%	-6.5%	61.1%	1.9%	-3.4%
Jan-09	14		32686000	18055000	48230000	3786000	2195000	1470000	1.49	0.335	164000	4122000	Jan-09	5.9%	12.2%	-0.1%	-19.5%	-21.9%	0.8%	-19.9%	15.5%	2.5%	-5.2%
Jan-10	13		33005000	19069000	47220000	3112000	1783000	1459000	1.21	0.355	166000	4054000	Jan-10	1.0%	5.6%	-2.1%	-17.8%	-18.8%	-0.7%	-18.8%	6.0%	1.2%	-1.6%
Jan-11	12		33699000	18112000	48815000	3560000	2010000	1354000	1.42	0.42	161000	3852000	Jan-11	2.1%	-5.0%	3.4%	14.4%	12.7%	-7.2%	17.4%	18.3%	-3.0%	-5.0%
Feb-12	11		33559000	16533000	50208000	3277000	1839000	1241000	1.43	0.53	161000	4349000	Feb-12	-0.4%	-8.7%	2.9%	-7.9%	-8.5%	-8.3%	0.7%	26.2%	0.0%	12.9%
Feb-13	10		32666000	13857000	50521000	3560000	1959000	1110000	1.69	0.62	160000	3762000	Feb-13	-2.7%	-16.2%	0.6%	8.6%	6.5%	-10.6%	18.2%	17.0%	-0.6%	-13.5%
Jan-14	9		32732000	11853000	53417000	4149000	2286000	1030000	2.14	0.7	167000	4111000	Jan-14	0.2%	-14.5%	5.7%	16.5%	16.7%	-7.2%	26.6%	12.9%	4.4%	9.3%
Jan-15	8		31827000	9968000	56223000	4792000	2698000	960000	2.71	0.87	175000	4929000	Jan-15	-2.8%	-15.9%	5.3%	15.5%	18.0%	-6.8%	26.6%	24.3%	4.8%	19.9%
Jan-16	7		31266000	7654000	59074000	4971000	2546000	910000	2.73	1.07	180000	4784000	Jan-16	-1.8%	-23.2%	5.1%	3.7%	-5.6%	-5.2%	0.7%	23.0%	2.9%	-2.9%
Feb-17	6		34408000	6434000	65017000	5846000	3093000	866000	3.47	1.33	190000	5617000	Feb-17	10.0%	-15.9%	10.1%	17.6%	21.5%	-4.8%	27.1%	24.3%	5.6%	17.4%
Feb-18	5		35291000	5873000	68619000	6586000	3447000	830000	4.09	1.58	200000	5065000	Feb-18	2.6%	-8.7%	5.5%	12.7%	11.4%	-4.2%	17.9%	18.8%	5.3%	-9.8%
Feb-19	4		34508000	3644000	71309000	4018000	2314000	801000	2.84	1.85	190000	6193000	Feb-19	-2.2%	-38.0%	3.9%	-39.0%	-32.9%	-3.5%	-30.6%	17.1%	-5.0%	22.3%
Jan-20	3		39471000	1972000	72148000	6314000	4281000	763000	5.49	2.13	200000	4296000	Jan-20	14.4%	-45.9%	1.2%	57.1%	85.0%	-4.7%	93.3%	15.1%	5.3%	-30.6%
Jan-21	2		46735000	1437000	89597000	9647000	5835000	731000	7.75	2.3	220000	11049000	Jan-21	18.4%	-27.1%	24.2%	52.8%	36.3%	-4.2%	41.2%	8.0%	10.0%	157.2%
Important ratios (DuPont and others)
	1/29/21	1/31/20	2/1/19	2/2/18	2/3/17	1/29/16	1/30/15	1/31/14	2/1/13	2/3/12	1/28/11	1/29/10	1/30/09	2/1/08	2/2/07
Inventories	16193000	13179000	12561000	11393000	10458000	9458000	8911000	9127000	8600000	8355000	8321000	8249000	8209000	7611000	7144000
Direct Costs	60025000	49205000	48401000	45210000	42553000	38504000	36665000	34941000	33194000	32858000	31663000	30757000	31729000	31556000	30729000
Profit margin	6.5%	5.9%	3.2%	5.0%	4.8%	4.3%	4.8%	4.3%	3.9%	3.7%	4.1%	3.8%	4.6%	5.8%	6.6%
TATO	1.92	1.83	2.07	1.94	1.89	1.89	1.77	1.63	1.55	1.50	1.45	1.43	1.48	1.56	1.69
ROA	12.5%	10.8%	6.7%	9.8%	9.0%	8.1%	8.5%	7.0%	6.0%	5.5%	6.0%	5.4%	6.7%	9.1%	11.2%
EM	32.52	20.02	9.47	6.01	5.35	4.08	3.19	2.76	2.36	2.03	1.86	1.73	1.81	1.92	1.77
ROE	406.1%	217.1%	63.5%	58.7%	48.1%	33.3%	27.1%	19.3%	14.1%	11.1%	11.1%	9.4%	12.2%	17.4%	19.7%
Inventory turnover	3.7	3.7	3.9	4.0	4.1	4.1	4.1	3.8	3.9	3.9	3.8	3.7	3.9	4.1	4.3
From standardized CS Income statement
Gross Profit %TR	33.006	31.8	32.125	34.114	34.551	34.821	34.786	34.588	34.297	34.556	35.137	34.864	34.213	34.644	34.517
Operating Income %TR	10.767	8.751	5.635	9.598	8.991	8.415	8.523	7.767	7.047	6.527	7.293	6.59	7.85	9.745	10.979
Net Income %TR	6.512	5.934	3.245	5.023	4.757	4.31	4.799	4.28	3.878	3.663	4.118	3.776	4.551	5.818	6.617
Data sorted for charts
1			6	7	8	9	10	12	15	16	17
	1		Profit margin	TATO	ROA	EM	ROE	Inventory turnover	Gross Profit %TR	Operating Income %TR	Net Income %TR
Feb-07	16		6.6%	1.69	11.2%	1.77	19.7%	4.30	34.52	10.98	6.62
Feb-08	15		5.8%	1.56	9.1%	1.92	17.4%	4.15	34.64	9.75	5.82
Jan-09	14		4.6%	1.48	6.7%	1.81	12.2%	3.87	34.21	7.85	4.55
Jan-10	13		3.8%	1.43	5.4%	1.73	9.4%	3.73	34.86	6.59	3.78
Jan-11	12		4.1%	1.45	6.0%	1.86	11.1%	3.81	35.14	7.29	4.12
Feb-12	11		3.7%	1.50	5.5%	2.03	11.1%	3.93	34.56	6.53	3.66
Feb-13	10		3.9%	1.55	6.0%	2.36	14.1%	3.86	34.30	7.05	3.88
Jan-14	9		4.3%	1.63	7.0%	2.76	19.3%	3.83	34.59	7.77	4.28
Jan-15	8		4.8%	1.77	8.5%	3.19	27.1%	4.11	34.79	8.52	4.80
Jan-16	7		4.3%	1.89	8.1%	4.08	33.3%	4.07	34.82	8.42	4.31
Feb-17	6		4.8%	1.89	9.0%	5.35	48.1%	4.07	34.55	8.99	4.76
Feb-18	5		5.0%	1.94	9.8%	6.01	58.7%	3.97	34.11	9.60	5.02
Feb-19	4		3.2%	2.07	6.7%	9.47	63.5%	3.85	32.13	5.64	3.25
Jan-20	3		5.9%	1.83	10.8%	20.02	217.1%	3.73	31.80	8.75	5.93
Jan-21	2		6.5%	1.92	12.5%	32.52	406.1%	3.71	33.01	10.77	6.51
Cost of debt, historical costs	1/29/21	1/31/20	2/1/19	2/2/18	2/3/17	1/29/16	1/30/15	1/31/14	2/1/13	2/3/12	1/28/11	1/29/10	1/30/09	2/1/08	2/2/07
Total long-term debt	21780000	17365000	15501000	15858000	15189000	12606000	11367000	10135000	9077000	7627000	6573000	5080000	5073000	5616000	4413000
Cash paid for interest, net of amount capitalized	824000	671000	635000	654000	619000	535000	504000	454000	444000	361000	319000	314000	309000	198000	179000
Implied interest rate	3.78%	3.86%	4.10%	4.12%	4.08%	4.24%	4.43%	4.48%	4.89%	4.73%	4.85%	6.18%	6.09%	3.53%	4.06%
Recent growth	Last year	Last 2 years	Last 3 years	Last 5 years	Last 7 years	Last 10 years
Cash dividends per share	8.0%	11.5%	13.3%	11.6%	18.5%	18.5%
Historical payout ratio	1/29/21	1/31/20	2/1/19	2/2/18	2/3/17	1/29/16	1/30/15	1/31/14	2/1/13	2/3/12	1/28/11	1/29/10	1/30/09	2/1/08	2/2/07
Net Income	5835000	4281000	2314000	3447000	3093000	2546000	2698000	2286000	1959000	1839000	2010000	1783000	2195000	2809000	3105000
Payment of Dividends	-1704000	-1618000	-1455000	-1288000	-1121000	-957000	-822000	-733000	-704000	-647000	-571000	-391000	-491000	-428000	-276000
Payout ratio	29.2%	37.8%	62.9%	37.4%	36.2%	37.6%	30.5%	32.1%	35.9%	35.2%	28.4%	21.9%	22.4%	15.2%	8.9%
ROE	406.1%	217.1%	63.5%	58.7%	48.1%	33.3%	27.1%	19.3%	14.1%	11.1%	11.1%	9.4%	12.2%	17.4%	19.7%
Sustainable growth	287.47%	135.04%	23.57%	36.76%	30.65%	20.76%	18.82%	13.10%	9.06%	7.21%	7.95%	7.30%	9.44%	14.79%	17.99%
Tax rate	1/29/21	1/31/20	2/1/19	2/2/18	2/3/17	1/29/16	1/30/15	1/31/14	2/1/13	2/3/12	1/28/11	1/29/10	1/30/09	2/1/08	2/2/07
Taxation	1904000	1342000	1080000	2042000	2108000	1873000	1578000	1387000	1178000	1067000	1218000	1042000	1311000	1702000	1893000
Earnings Before Tax	7739000	5623000	3394000	5489000	5201000	4419000	4276000	3673000	3137000	2906000	3228000	2825000	3506000	4511000	4998000
Implied rate	24.6%	23.9%	31.8%	37.2%	40.5%	42.4%	36.9%	37.8%	37.6%	36.7%	37.7%	36.9%	37.4%	37.7%	37.9%
Capital structure (book)	1/29/21	1/31/20	2/1/19	2/2/18	2/3/17	1/29/16	1/30/15	1/31/14	2/1/13	2/3/12	1/28/11	1/29/10	1/30/09	2/1/08	2/2/07
Total long-term debt	21780000	17365000	15501000	15858000	15189000	12606000	11367000	10135000	9077000	7627000	6573000	5080000	5073000	5616000	4413000
Total Equity	1437000	1972000	3644000	5873000	6434000	7654000	9968000	11853000	13857000	16533000	18112000	19069000	18055000	16098000	15725000
Value of firm (V)	23217000	19337000	19145000	21731000	21623000	20260000	21335000	21988000	22934000	24160000	24685000	24149000	23128000	21714000	20138000
D/V	93.8%	89.8%	81.0%	73.0%	70.2%	62.2%	53.3%	46.1%	39.6%	31.6%	26.6%	21.0%	21.9%	25.9%	21.9%
E/V	6.2%	10.2%	19.0%	27.0%	29.8%	37.8%	46.7%	53.9%	60.4%	68.4%	73.4%	79.0%	78.1%	74.1%	78.1%

LOW

Total Assets 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 27767000 30869000 32686000 33005000 33699000 33559000 32666000 32732000 31827000 31266000 34408000 35291000 34508000 39471000 46735000

LOW

TATO 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 1.6900277307595346 1.5641258220220933 1.4755552836076609 1.4306923193455536 1.4485593044303986 1.4961113263208081 1.5465927876079104 1.6319503849443968 1.7665189933075691 1.889400626879038 1.8895896303185307 1.944376753279873 2.066448359800626 1.8278736287400876 1.9171284904247352

LOW

ROA 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 0.11182338747434005 9.0997440798211787E-2 6.7154133268065838E-2 5.4022117860930162E-2 5.9645686815632509E-2 5.4799010697577401E-2 5.9970611645135619E-2 6.9839912012709268E-2 8.4770792094762321E-2 8.1430307682466577E-2 8.9891885607998143E-2 9.7673627837125618E-2 6.7056914338704074E-2 0.10845937523751616 0.124852893976677

LOW

EM 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 1.7657869634340222 1.9175673996769784 1.810357241761285 1.7308196549373329 1.8605896643109541 2.0298191495796285 2.3573645089124629 2.7614949801737958 3.1929173354735152 4.0849229161222889 5.3478396021137709 6.0090243487144557 9.4698133918770591 20.015720081135903 32.522616562282536

LOW

ROE 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 0.19745627980922098 0.17449372592868675 0.12157297147604541 9.3502543395039078E-2 0.11097614840989399 0.11123208129196152 0.14137259147001516 0.19286256643887623 0.27066613162118786 0.33263652991899662 0.4807273857631334 0.58692320790056185 0.63501646542261259 2.170892494929006 4.0605427974947812

LOW

Inventory turnover 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 4.3013717805151179 4.1461043226908423 3.8651480082835912 3.728573160383077 3.8051916836918638 3.9327348892878518 3.8597674418604653 3.8283116029363429 4.1145774884973632 4.0710509621484459 4.0689424364123159 3.9682261037479152 3.8532760130562855 3.7335913195234842 3.7068486383005004

Du Pont Analysis

Profit margin 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 6.6166599185969704E-2 5.8177826564215149E-2 4.5511092680904003E-2 3.7759423972892843E-2 4.1175868073338111E-2 3.6627629063097515E-2 3.877595455355199E-2 4.2795364771514688E-2 4.798747843409281E-2 4.30984866438704E-2 4.7572173431564051E-2 5.023390023171425E-2 3.2450321838758081E-2 5.9336364140378114E-2 6.5124948379968073E-2 ROA 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 0.11182338747434005 9.0997440798211787E-2 6.7154133268065838E-2 5.4022117860930162E-2 5.9645686815632509E-2 5.4799010697577401E-2 5.9970611645135619E-2 6.9839912012709268E-2 8.4770792094762321E-2 8.1430307682466577E-2 8.9891885607998143E-2 9.7673627837125618E-2 6.7056914338704074E-2 0.10845937523751616 0.124852893976677 ROE 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 0.19745627980922098 0.17449372592868675 0.12157297147604541 9.3502543395039078E-2 0.11097614840989399 0.11123208129196152 0.14137259147001516 0.19286256643887623 0.27066613162118786 0.33263652991899662 0.4807273857631334 0.58692320790056185 0.63501646542261259 2.170892494929006 4.0605427974947812 TATO 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43 861 44225 1.6900277307595346 1.5641258220220933 1.4755552836076609 1.4306923193455536 1.4485593044303986 1.4961113263208081 1.5465927876079104 1.6319503849443968 1.7665189933075691 1.889400626879038 1.8895896303185307 1.944376753279873 2.066448359800626 1.8278736287400876 1.9171284904247352 EM 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 1.7657869634340222 1.9175673996769784 1.810357241761285 1.7308196549373329 1.8605896643109541 2.0298191495796285 2.3573645089124629 2.7614949801737958 3.1929173354735152 4.0849229161222889 5.3478396021137709 6.0090243487144557 9.4698133918770591 20.015720081135903 32.522616562282536

Growth

Total Assets 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 0.11171534555407492 5.8861641128640452E-2 9.7595300740378477E-3 2.1027117103469273E-2 -4.1544259473574874E-3 -2.6609851306653942E-2 2.0204493969264714E-3 -2.7648784064523979E-2 -1.7626543500801173E-2 0.10049254781551853 2.5662636596140542E-2 -2.2186959848119914E-2 0.14382172249913072 0.18403384763497255

Growth

Total Equity 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 2.3720190779014327E-2 0.12156789663312217 5.6161728053170767E-2 -5.0186166028632906E-2 -8.7179770318021155E-2 -0.16185810197786243 -0.14462004762935698 -0.15903146882645747 -0.2321428571428571 -0.15939378102952706 -8.7193036990985351E-2 -0.37953345819853568 -0.45883644346871566 -0.27129817444219062

Growth

Total Revenue 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 2.8895944765273684E-2 -1.097694840834218E-3 -2.0941322828115227E-2 3.377806014400675E-2 2.8536310560278499E-2 6.234066284257489E-3 5.7322697492131924E-2 5.2530093415953827E-2 5.0708784661081863E-2 0.10060263398449409 5.5400895150499174E-2 3.9201970299771238E-2 1.176569577472697E-2 0.24185008593446811

LOW

Total Equity 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 15725000 16098000 18055000 19069000 18112000 16533000 13857000 11853000 9968000 7654000 6434000 5873000 3644000 1972000 1437000

Growth

Operating Income 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 -8.6762422360248448E-2 -0.19532412327311366 -0.17802430005282621 0.14395886889460163 -7.9494382022471943E-2 8.6359475129691887E-2 0.16544943820224711 0.15497710291636535 3.7353923205342143E-2 0.17602092134379399 0.12658227848101267 -0.38991800789553599 0.5714285714285714 0.52787456445993031

Growth

Shares Outstanding 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 -4.3620859298130532E-2 8.2304526748970819E-3 -7.4829931972789643E-3 -7.1967100753941082E-2 -8.3456425406203794E-2 -0.10556003223207089 -7.2072072072072113E-2 -6.7961165048543659E-2 -5.208333333333337E-2 -4.8351648351648402E-2 -4.1570438799076181E-2 -3.4939759036144546E-2 -4.7440699126092389E-2 -4.1939711664482293E-2

Growth

Net Income 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 -9.5330112721417115E-2 -0.21858312566749738 -0.18769931662870154 0.12731351654514866 -8.5074626865671688E-2 6.5252854812398065E-2 0.16692189892802456 0.18022747156605434 -5.633802816901412E-2 0.21484681853888454 0.11445198836081483 -0.32869161589788221 0.85004321521175452 0.36299929922915197

Growth

EPS Net Diluted 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 -6.5326633165829096E-2 -0.19892473118279574 -0.18791946308724838 0.17355371900826433 7.0422535211267512E-3 0.18181818181818188 0.26627218934911245 0.26635514018691575 7.3800738007379074E-3 0.27106227106227121 0.17867435158501421 -0.30562347188264061 0.93309859154929597 0.41165755919854274

Growth

Cash dividends per share 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 0.61111111111111116 0.15517241379310365 5.9701492537313383E-2 0.18309859154929575 0.26190476190476208 0.16981132075471694 0.12903225806451601 0.24285714285714288 0.22988505747126453 0.2429906542056075 0.18796992481203012 0.17088607594936711 0.15135135135135114 7.9812206572769995E-2

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Growth

Number of full time employees 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 1.9108280254777066E-2 2.4999999999999911E-2 1.2195121951219523E-2 -3.0120481927710885E-2 0 -6.2111801242236142E-3 4.3749999999999956E-2 4.7904191616766401E-2 2.857142857142847E-2 5.555555555555558E-2 5.2631578947368363E-2 -5.0000000000000044E-2 5.2631578947368363E-2 0.10000000000000009

Profitability analysis

Gross Profit %TR 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 34.517000000000003 34.643999999999998 34.213000000000001 34.863999999999997 35.137 34.555999999999997 34.296999999999997 34.588000000000001 34.786000000000001 34.820999999999998 34.551000000000002 34.113999999999997 32.125 31.8 33.006 Operating Income %TR 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 10.978999999999999 9.7449999999999992 7.85 6.59 7.2930000000000001 6.5270000000000001 7.0469999999999997 7.7670000000000003 8.5229999999999997 8.4149999999999991 8.9909999999999997 9.5980000000000008 5.6349999999999998 8.7509999999999994 10.766999999999999 Net Income %TR 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 6.617 5.8179999999999996 4.5510000000000002 3.7759999999999998 4.1180000000000003 3.6629999999999998 3.8780000000000001 4.28 4.7990000000000004 4.3099999999999996 4.7569999999999997 5.0229999999999997 3.2450000000000001 5.9340000000000002 6.5119999999999996

LOW

Operating Income %TR 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 10.978999999999999 9.7449999999999992 7.85 6.59 7.2930000000000001 6.5270000000000001 7.0469999999999997 7.7670000000000003 8.5229999999999997 8.4149999999999991 8.9909999999999997 9.5980000000000008 5.6349999999999998 8.7509999999999994 10.766999999999999

LOW

Net Income %TR 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 6.617 5.8179999999999996 4.5510000000000002 3.7759999999999998 4.1180000000000003 3.6629999999999998 3.8780000000000001 4.28 4.7990000000000004 4.3099999999999996 4.7569999999999997 5.0229999999999997 3.2450000000000001 5.9340000000000002 6.5119999999999996

LOW

Total Revenue 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 46927000 48283000 48230000 47220000 48815000 50208000 50521000 53417000 56223000 59074000 65017000 68619000 71309000 72148000 89597000

Growth

Cash Flow from Operations 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 -3.4429142603287444E-2 -5.1759834368530044E-2 -1.6496846191169312E-2 -4.9827331031080391E-2 0.12902388369678097 -0.13497355713957226 9.2769803296119058E-2 0.19897835076623682 -2.9417731791438473E-2 0.17412207357859533 -9.8273099519316398E-2 0.22270483711747291 -0.30631357984821572 1.571927374301676

LOW

Cash Flow from Operations 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 4502000 4347000 4122000 4054000 3852000 4349000 3762000 4111000 4929000 4784000 5617000 5065000 6193000 4296000 11049000

LOW

Operating Income 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 5152000 4705000 3786000 3112000 3560000 3277000 3560000 4149000 4792000 4971000 5846000 6586000 4018000 6314000 9647000

LOW

Net Income 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 3105000 2809000 2195000 1783000 2010000 1839000 1959000 2286000 2698000 2546000 3093000 3447000 2314000 4281000 5835000

LOW

Shares Outstanding 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 1524500 1458000 1470000 1459000 1354000 1241000 1110000 1030000 960000 910000 866000 830000 801000 763000 731000

LOW

EPS Net Diluted 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 1.99 1.86 1.49 1.21 1.42 1.43 1.69 2.14 2.71 2.73 3.47 4.09 2.84 5.49 7.75

LOW

Cash dividends per share 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 0.18 0.28999999999999998 0.33500000000000002 0.35499999999999998 0.42 0.53 0.62 0.7 0.87 1.07 1.33 1.58 1.85 2.13 2.2999999999999998

LOW

Number of full time employees 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 157000 160000 164000 166000 161000 161000 160000 167000 175000 180000 190000 200000 190000 200000 220000 Number of full time employees 39115 39479 39843 40207 40571 40942 41306 41670 42034 42398 42769 43133 43497 43861 44225 157000 160000 164000 166000 161000 161000 160000 167000 175000 180000 190000 200000 190000 200000 220000

Cost of debt

Cost of debt, historical costs	1/29/21	1/31/20	2/1/19	2/2/18	2/3/17
Total long-term debt	21780000	17365000	15501000	15858000	15189000
Cash paid for interest, net of amount capitalized	824000	671000	635000	654000	619000
Implied interest rate	3.8%	3.9%	4.1%	4.1%	4.1%
https://www.moodys.com/credit-ratings/McDonalds-Corporation-credit-rating-479500
https://www.standardandpoors.com/en_US/web/guest/ratings/entity/-/org-details/sectorCode/CORP/entityId/101460
						10 year bonds
							3.038
							3.065
						Average	3.0515
						RD	3.05%
							Lower than the historical cost of debt.
http://finra-markets.morningstar.com/BondCenter/Results.jsp

https://www.moodys.com/credit-ratings/McDonalds-Corporation-credit-rating-479500 https://www.standardandpoors.com/en_US/web/guest/ratings/entity/-/org-details/sectorCode/CORP/entityId/101460 http://finra-markets.morningstar.com/BondCenter/Results.jsp

Cost of equity

DCF approach
Growth of dividends
Recent growth	Last year	Last 2 years	Last 3 years	Last 5 years	Last 7 years	Last 10 years
Cash dividends per share	8.0%	11.5%	13.3%	11.6%	18.5%	18.5%
Historical payout ratio
	1/29/21	1/31/20	2/1/19	2/2/18	2/3/17	1/29/16
Net Income	5835000	4281000	2314000	3447000	3093000	2546000
Payment of Dividends	-1704000	-1618000	-1455000	-1288000	-1121000	-957000
Payout ratio	29.2%	37.8%	62.9%	37.4%	36.2%	37.6%
ROE	406.1%	217.1%	63.5%	58.7%	48.1%	33.3%		https://finance.yahoo.com/quote/LOW?p=LOW
Sustainable growth	287.5%	135.0%	23.6%	36.8%	30.6%	20.8%
Last 5 years average	25.7%
https://finance.yahoo.com/quote/LOW?p=LOW
Three estimates of g
Analysts earnings estimate	16.80%
My estimate based on historical growth	8.00%
Sustainable growth	26%
Average	16.84%
							http://finra-markets.morningstar.com/BondCenter/Default.jsp
Dividend yield	1.42%
Rs	18.26%
CAPM approach
Average beta estimate	1.312
Market Risk Premium	5.50%	Given by instructor based on market expectations
Risk free rate	1.93%
Rs	9.14%
Rd plus risk premium approach
Rd	3.05%
Risk Premium	4%	Given by instructor based on historical averages
Rs	7.05%

Growth

http://finra-markets.morningstar.com/BondCenter/Default.jsp https://finance.yahoo.com/quote/LOW?p=LOW

CAPM & beta

Date	Open	High	Low	Close	Adj Close	Volume	^GSPC			LOW	Date	Open	High	Low	Close	Adj Close	Volume
1/1/17	2,251.57	2,300.99	2,245.13	2,278.87	2,278.87	70,483,180,000		Ret S&P	Ret LOW		1/1/17	71.709999	74.75	70.489998	73.080002	66.602631	104191300
2/1/17	2,285.59	2,371.54	2,271.65	2,363.64	2,363.64	69,162,420,000		0.0371982605	0.0226397363		2/1/17	72.910004	77.519997	71.790001	74.370003	68.110497	106682500
3/1/17	2,380.13	2,400.98	2,322.25	2,362.72	2,362.72	81,547,770,000		-0.0003892302	0.1054188461		3/1/17	81.279999	84	80.279999	82.209999	75.290627	128273700
3/31/17	2,362.34	2,398.16	2,328.95	2,384.20	2,384.20	65,265,670,000		0.0090912169	0.0324776947		4/1/17	83.110001	85.760002	81.050003	84.879997	77.735893	81098100
4/30/17	2,388.50	2,418.71	2,352.72	2,411.80	2,411.80	79,607,170,000		0.01157621	-0.0680762618		5/1/17	84.839996	86.25	78.099998	78.769997	72.443924	136012800
5/31/17	2,415.65	2,453.82	2,405.70	2,423.41	2,423.41	81,002,490,000		0.004813832	-0.0157422036		6/1/17	78.769997	81.449997	75.790001	77.529999	71.303497	131718300
6/30/17	2,431.39	2,484.04	2,407.70	2,470.30	2,470.30	63,169,400,000		0.0193487689	-0.0016765657		7/1/17	78	78.449997	71.580002	77.400002	71.183952	122500900
7/31/17	2,477.10	2,490.87	2,417.35	2,471.65	2,471.65	70,616,030,000		0.0005464923	-0.0400182193		8/1/17	77.269997	78.910004	70.760002	73.889999	68.335297	149943300
8/31/17	2,474.42	2,519.44	2,446.55	2,519.36	2,519.36	66,337,980,000		0.0193028948	0.0818782715		9/1/17	74.190002	80.150002	73.720001	79.940002	73.930473	145099700
9/30/17	2,521.20	2,582.98	2,520.40	2,575.26	2,575.26	70,871,570,000		0.0221881748	0.0001249823		10/1/17	80.040001	82.739998	79.400002	79.949997	73.939713	110493800
10/31/17	2,583.21	2,657.74	2,557.45	2,647.58	2,647.58	73,173,260,000		0.0280826014	0.0481208792		11/1/17	79.620003	84.68	75.360001	83.370003	77.497757	142241900
12/1/17	2,645.10	2,694.97	2,605.52	2,673.61	2,673.61	65,251,190,000		0.0098316198	0.1147894771		12/1/17	83.239998	93.550003	82.120003	92.940002	86.393684	131002100
1/1/18	2,683.73	2,872.87	2,682.36	2,823.81	2,823.81	76,860,120,000		0.0561787246	0.1268563452		1/1/18	93.019997	108.980003	91.169998	104.730003	97.353271	128537300
2/1/18	2,816.45	2,835.96	2,532.69	2,713.83	2,713.83	79,579,410,000		-0.0389473796	-0.1412751812		2/1/18	103.839996	105.080002	86.75	89.589996	83.59967	151269400
3/1/18	2,715.22	2,801.90	2,585.89	2,640.87	2,640.87	76,369,800,000		-0.0268845138	-0.0205382988		3/1/18	89.57	90.330002	83.739998	87.75	81.882675	170855700
3/31/18	2,633.45	2,717.49	2,553.80	2,648.05	2,648.05	69,648,590,000		0.002718801	-0.0606265489		4/1/18	87.349998	89.150002	81.309998	82.43	76.918411	132443800
4/30/18	2,642.96	2,742.24	2,594.62	2,705.27	2,705.27	75,617,280,000		0.0216083533	0.1582443766		5/1/18	81.75	97.980003	81.160004	95.010002	89.090317	143773800
5/31/18	2,718.70	2,791.47	2,691.99	2,718.37	2,718.37	77,439,710,000		0.0048424002	0.0058939402		6/1/18	95.440002	101.330002	95.160004	95.57	89.61541	91697700
6/30/18	2,704.95	2,848.03	2,698.95	2,816.29	2,816.29	64,542,170,000		0.0360215865	0.0394474008		7/1/18	95.360001	101.980003	93.959999	99.339996	93.150505	76344400
7/31/18	2,821.17	2,916.50	2,796.34	2,901.52	2,901.52	69,238,220,000		0.0302632186	0.0999445253		8/1/18	98.989998	109.800003	96.239998	108.75	102.460388	107517700
8/31/18	2,896.96	2,940.91	2,864.12	2,913.98	2,913.98	62,492,080,000		0.0042943009	0.055816195		9/1/18	108.389999	117.699997	108.029999	114.82	108.179337	94437200
9/30/18	2,926.29	2,939.86	2,603.54	2,711.74	2,711.74	91,327,930,000		-0.069403359	-0.1707020907		10/1/18	115.580002	115.629997	91.610001	95.220001	89.712898	117775300
10/31/18	2,717.58	2,815.15	2,631.09	2,760.17	2,760.17	80,080,110,000		0.0178593818	-0.0040679101		11/1/18	95.290001	100.690002	84.75	94.370003	89.347954	114556600
12/1/18	2,790.50	2,800.18	2,346.58	2,506.85	2,506.85	83,522,570,000		-0.0917769558	-0.0212991783		12/1/18	95.489998	96.059998	85.900002	92.360001	87.444916	106725000
1/1/19	2,476.96	2,708.95	2,443.96	2,704.10	2,704.10	80,401,630,000		0.0786844047	0.0411431924		1/1/19	91.220001	98.220001	90.230003	96.160004	91.042679	98822400
2/1/19	2,702.32	2,813.49	2,681.83	2,784.49	2,784.49	70,183,430,000		0.0297289301	0.098417216		2/1/19	96.209999	109.919998	95.839996	105.089996	100.002846	88244000
3/1/19	2,798.22	2,860.31	2,722.27	2,834.40	2,834.40	78,596,280,000		0.0179242878	0.0416785038		3/1/19	105.900002	109.940002	97.550003	109.470001	104.170815	99741000
3/31/19	2,848.63	2,949.52	2,848.63	2,945.83	2,945.83	69,604,840,000		0.0393134349	0.0335251961		4/1/19	110.209999	118.230003	105.839996	113.139999	107.663162	86340500
4/30/19	2,952.33	2,954.13	2,750.52	2,752.06	2,752.06	76,860,120,000		-0.0657777265	-0.1720310611		5/1/19	113.040001	113.129997	91.599998	93.279999	89.141754	132427600
5/31/19	2,751.53	2,964.15	2,728.81	2,941.76	2,941.76	70,904,280,000		0.0689301832	0.0817968199		6/1/19	93.029999	102.959999	92.900002	100.910004	96.433266	95671900
6/30/19	2,971.41	3,027.98	2,952.22	2,980.38	2,980.38	70,349,470,000		0.0131281954	0.0048558866		7/1/19	102.099998	108.309998	100.839996	101.400002	96.901535	92408500
7/31/19	2,980.32	3,013.59	2,822.12	2,926.46	2,926.46	79,599,440,000		-0.0180916527	0.1124754113		8/1/19	101.739998	113.239998	91.82	112.199997	107.800575	125947700
8/31/19	2,909.01	3,021.99	2,891.85	2,976.74	2,976.74	73,992,330,000		0.0171811677	-0.0199643462		9/1/19	111.370003	115.959999	108.809998	109.959999	105.648407	74933600
9/30/19	2,983.69	3,050.10	2,855.94	3,037.56	3,037.56	77,564,550,000		0.0204317475	0.0150054037		10/1/19	110.089996	113.809998	104.589996	111.610001	107.233704	75839900
10/31/19	3,050.72	3,154.26	3,050.72	3,140.98	3,140.98	72,179,920,000		0.0340470641	0.0562599796		11/1/19	111.919998	121.220001	110.150002	117.309998	113.26667	86957200
12/1/19	3,143.85	3,247.93	3,070.33	3,230.78	3,230.78	72,054,000,000		0.0285898032	0.0208847581		12/1/19	117.599998	121.459999	113.610001	119.760002	115.632217	66612000
1/1/20	3,244.67	3,337.77	3,214.64	3,225.52	3,225.52	77,104,420,000		-0.0016280898	-0.0293921633		1/1/20	120.050003	123.139999	116.089996	116.239998	112.233536	76244300
2/1/20	3,235.66	3,393.52	2,855.84	2,954.22	2,954.22	84,292,270,000		-0.084110469	-0.0790502849		2/1/20	117	126.730003	102.93	106.57	103.361443	87816100
3/1/20	2,974.28	3,136.72	2,191.86	2,584.59	2,584.59	161,801,100,000		-0.1251193208	-0.1925495467		3/1/20	107.199997	113.550003	60	86.050003	83.459244	202085300
3/31/20	2,498.08	2,954.86	2,447.49	2,912.43	2,912.43	123,163,450,000		0.1268441029	0.2173155678		4/1/20	80.739998	107.800003	79.080002	104.75	101.596237	132098400
4/30/20	2,869.09	3,068.67	2,766.64	3,044.31	3,044.31	106,799,100,000		0.045281775	0.2516277251		5/1/20	102.5	131.399994	102.309998	130.350006	127.160667	134518500
5/31/20	3,038.78	3,233.13	2,965.66	3,100.29	3,100.29	131,044,000,000		0.0183884033	0.0365937291		6/1/20	129.889999	137.289993	123.089996	135.119995	131.81395	108753500
6/30/20	3,105.92	3,279.99	3,101.17	3,271.12	3,271.12	97,197,020,000		0.055101297	0.1020576426		7/1/20	135.399994	149.919998	134.050003	148.910004	145.266571	77540100
7/31/20	3,288.26	3,514.77	3,284.53	3,500.31	3,500.31	84,402,300,000		0.0700646873	0.1102074613		8/1/20	149.899994	171.320007	148.710007	164.690002	161.276031	84474800
8/31/20	3,507.44	3,588.11	3,209.45	3,363.00	3,363.00	92,084,120,000		-0.0392279541	0.0071041059		9/1/20	164.410004	171.720001	151.889999	165.860001	162.421753	86104100
9/30/20	3,385.87	3,549.85	3,233.94	3,269.96	3,269.96	89,737,600,000		-0.0276657746	-0.0467863501		10/1/20	167.339996	180.669998	155.770004	158.100006	154.822632	76284400
10/31/20	3,296.20	3,645.99	3,279.74	3,621.63	3,621.63	100,977,880,000		0.1075456581	-0.0110330187		11/1/20	159.889999	173.559998	146.720001	155.820007	153.114471	119732000
12/1/20	3,645.87	3,760.20	3,633.40	3,756.07	3,756.07	96,056,410,000		0.0371214067	0.0300986312		12/1/20	155.820007	166.190002	149.309998	160.509995	157.723007	112753000
1/1/21	3,764.61	3,870.90	3,662.71	3,714.24	3,714.24	105,548,790,000		-0.0111366402	0.0394993103		1/1/21	160.770004	175.149994	157.130005	166.850006	163.952957	81117500
2/1/21	3,731.17	3,950.43	3,725.62	3,811.15	3,811.15	98,596,960,000		0.026091475	-0.0391886436		2/1/21	167.119995	179.460007	157.949997	159.75	157.527863	71474000
3/1/21	3,842.51	3,994.41	3,723.34	3,972.89	3,972.89	120,863,560,000		0.042438634	0.1904852159		3/1/21	160.759995	192.910004	150.839996	190.179993	187.534592	102104800
3/31/21	3,992.78	4,218.78	3,992.78	4,181.17	4,181.17	82,869,290,000		0.0524253126	0.0319171249		4/1/21	191.199997	208.979996	189.690002	196.25	193.520157	75171000
4/30/21	4,191.98	4,238.04	4,056.88	4,204.11	4,204.11	75,155,370,000		0.0054865026	-0.0043073394		5/1/21	198.75	215.220001	186.380005	194.830002	192.6866	89800200
5/31/21	4,216.52	4,302.43	4,164.40	4,297.50	4,297.50	85,705,180,000		0.0222139763	-0.0044141938		6/1/21	195	196.100006	184.460007	193.970001	191.836044	84601100
6/30/21	4,300.73	4,429.97	4,233.13	4,395.26	4,395.26	66,496,430,000		0.0227481094	-0.006598859		7/1/21	194.5	201.419998	190.039993	192.690002	190.570145	66190800
7/31/21	4,406.86	4,537.36	4,367.73	4,522.68	4,522.68	63,217,960,000		0.0289903214	0.0625309594		8/1/21	193.809998	209.490005	182.080002	203.889999	202.486679	92307400
8/31/21	4,528.80	4,545.85	4,305.91	4,307.54	4,307.54	66,268,850,000		-0.0475691404	-0.0050517842		9/1/21	204.550003	212.25	201.479996	202.860001	201.46376	64883400
9/30/21	4,317.16	4,608.08	4,278.94	4,605.38	4,605.38	61,874,700,000		0.0691438733	0.1526176122		10/1/21	203.729996	234.960007	201.580002	233.820007	232.210678	63762400
10/31/21	4,610.62	4,743.83	4,560.00	4,567.00	4,567.00	67,520,800,000		-0.0083337314	0.0498487369		11/1/21	235	256.390015	230.210007	244.589996	243.786087	67133800
12/1/21	4,602.82	4,808.93	4,495.12	4,766.18	4,766.18	68,699,830,000		0.043612875	0.0567889053		12/1/21	248.300003	263.309998	242.300003	258.480011	257.630432	75574600
1/1/22	4,778.14	4,818.62	4,222.62	4,515.55	4,515.55	73,279,440,000		-0.0525850891	-0.0817471245		1/1/22	259.200012	260.829987	220.199997	237.350006	236.569885	84261400
							Monthly Average	1.2%	2.5%
							Monthly SD	4.5%	8.7%
								S&P 500	LOW
						Yearly average return		15.0%	30.0%
						Yearly Standard Deviation		15.7%	30.0%
							Beta	1	1.312
							CORREL	0.682
							SLOPE	1.307
							Long formula for beta
								1.307
								Average beta estimate
	https://finance.yahoo.com/quote/mcd/?p=mcd
								Using 5 years of data	1.307
								Yahoo (3 years)	1.3
								MSN Money	1.32
								Reuters	1.32
								Average beta	1.312
									https://www.reuters.com/finance/stocks/financial-highlights/MCD.N
	https://www.msn.com/en-us/money/stockdetails/nys-mcd/fi-a1xdec?symbol=MCD&form=PRFIHQ

Ret LOW

3.7198260541408734E-2 -3.8923017041514463E-4 9.0912169025529899E-3 1.1576210049492719E-2 4.8138319927024664E-3 1.9348768883515444E-2 5.4649232886694321E-4 1.9302894827342154E-2 2.2188174774546043E-2 2.8082601368405458E-2 9.8316198188534987E-3 5.6178724645703726E-2 -3.8947379604151844E-2 -2.6884513768364315E-2 2.718801001185378E-3 2.1608353316591389E-2 4.8424002040461378E-3 3.6021586465418753E-2 3.0263218631604083E-2 4.2943009181395375E-3 -6.9403358979814644E-2 1.785938179914015E-2 -9.1776955767217339E-2 7.8684404731036883E-2 2.9728930143116061E-2 1.7924287751078349E-2 3.9313434942139347E-2 -6.5777726481161536E-2 6.8930183208214979E-2 1.3128195366039375E-2 -1.8091652742267761E-2 1.7181167690656807E-2 2.0431747482144935E-2 3.404706409091518E-2 2.8589803182446305E-2 -1.6280898111292741E-3 -8.4110469009648137E-2 -0.12511932083595656 0.12684410293315374 4.528177501261843E-2 1.8388403283502663E-2 5.5101296975444303E-2 7.0064687324219221E-2 -3.9227954095494399E-2 -2.7665774606006499E-2 0.10754565805086314 3.712140665943231E-2 -1.1136640158463607E-2 2.6091474971999817E-2 4.2438634008107767E-2 5.242531255584737E-2 5.4865025818131574E-3 2.221397632316946E-2 2.274810936591054E-2 2.8990321391681118E-2 -4.7569140421166334E-2 6.9143873301234615E-2 -8.3337314184714906E-3 4.3612874972629889E-2 -5.2585089106999772E-2 2.2639736259067567E-2 0.10541884608476737 3.2477694733502593E-2 -6.8076261759802636E-2 -1.574220358356071E-2 -1.6765657370211295E-3 -4.0018219275041234E-2 8.1878271488305732E-2 1.2498229248425474E-4 4.812087923576347E-2 0.11478947706834908 0.12685634519301225 -0.14127518119036808 -2.0538298775581221E-2 -6.0626548900606925E-2 0.15824437662915303 5.8939401910536038E-3 3.9447400843225511E-2 9.9944525260491135E-2 5.5816195035295113E-2 -0.17070209073290965 -4.0679100568125071E-3 -2.129917826657779E-2 4.1143192361234648E-2 9.8417215952091963E-2 4.1678503829780889E-2 3.3525196092590859E-2 -0.17203106109775967 8.1796819927954179E-2 4.8558865568235632E-3 0.11247541125122518 -1.996434620130727E-2 1.5005403725585786E-2 5.6259 979604919685E-2 2.088475806695822E-2 -2.9392163258445514E-2 -7.9050284934442439E-2 -0.19254954673959024 0.21731556782373929 0.25162772514891474 3.6593729097064376E-2 0.10205764260914707 0.11020746128852998 7.1041058791929679E-3 -4.6786350101762575E-2 -1.10330187385006E-2 3.0098631239107387E-2 3.9499310332068438E-2 -3.9188643605860718E-2 0.19048521593922718 3.191712492167853E-2 -4.3073394158108513E-3 -4.4141938256215818E-3 -6.5988589714662815E-3 6.2530959400802333E-2 -5.051784171935636E-3 0.1526176122196865 4.9848736930176774E-2 5.6788905266771827E-2 -8.174712450119237E-2

https://www.reuters.com/finance/stocks/financial-highlights/MCD.N https://finance.yahoo.com/quote/mcd/?p=mcd https://www.msn.com/en-us/money/stockdetails/nys-mcd/fi-a1xdec?symbol=MCD&form=PRFIHQ

WACC

Tax rate	1/29/21	1/31/20	2/1/19	2/2/18	2/3/17	1/29/16	1/30/15	1/31/14	2/1/13	2/3/12
Taxation	1904000	1342000	1080000	2042000	2108000	1873000	1578000	1387000	1178000	1067000
Earnings Before Tax	7739000	5623000	3394000	5489000	5201000	4419000	4276000	3673000	3137000	2906000
Implied rate	24.6%	23.9%	31.8%	37.2%	40.5%	42.4%	36.9%	37.8%	37.6%	36.7%
Average tax rate last 5 years	24.2%
Capital structure
Based on book value of firm
	1/29/21	1/31/20	2/1/19	2/2/18	2/3/17	1/29/16	1/30/15	1/31/14	2/1/13	2/3/12
Total long-term debt	21780000	17365000	15501000	15858000	15189000	12606000	11367000	10135000	9077000	7627000
Total Equity	1437000	1972000	3644000	5873000	6434000	7654000	9968000	11853000	13857000	16533000
Value of firm (V)	23217000	19337000	19145000	21731000	21623000	20260000	21335000	21988000	22934000	24160000
D/V	0.9381056984	0.8980193412	81.0%	73.0%	70.2%	62.2%	53.3%	46.1%	39.6%	31.6%
E/V	0.0618943016	0.1019806588	19.0%	27.0%	29.8%	37.8%	46.7%	53.9%	60.4%	68.4%
Average for last 5 years
D/V	81.6%
E/V	18.4%
											Weighted Average Cost of Capital
Capital structure
Based on market value of firm											Tc	24.2%
											Rd	3.05%
Calculating historical market equity											1) DCF Rs	18.26%
	1/29/21	1/31/20	2/1/19	2/2/18							2) CAPM	9.14%
Total long-term debt	21780000	17365000	15501000	15858000							3) Rd + RP	7.05%
Shares Outstanding	731000	763000	801000	830000							Avg Rs	11.48%
Stock price end of year	166.85	106.57	105.09	89.59
Market capitalization (E )	121967354	81312910	84177087	74359697							Calculating capital structure with book values
Value of the firm (V)	143747354	98677910	99678087	90217697
											D/V	81.6%
D/V	15.2%	17.6%	15.6%	17.6%							E/V	18.4%
E/V	84.8%	82.4%	84.4%	82.4%
Average for last 4 years												Estimate of WACC	4.00%
D/V	16.5%
E/V	83.5%										Calculating capital structure with market values
Market capitalization at the close of the most recent fiscal year											D/V	20.8%
Based on market value of firm	Oct-21										E/V	79.2%
Debt at the close of the fiscal year	28017
Stock price at close of fiscal year	158.10											Estimate of WACC	9.57%
Shares outstanding, most recent	674
Market capitalization (E )	106519.8790425
Value of the firm (V)	134536.8790425
						https://finance.yahoo.com/quote/LOW/key-statistics?p=LOW
D/V	20.8%
E/V	79.2%
https://finance.yahoo.com/quote/LOW/balance-sheet?p=LOW
														E

https://finance.yahoo.com/quote/LOW/key-statistics?p=LOW https://finance.yahoo.com/quote/LOW/balance-sheet?p=LOW

Cap Bud

Capital Budgeting template			Must be adjusted to fit the instructions of MP3
Your companyhas developed a powerful new server that would be used for corporations’ Internet activities. It would cost $10 million at Year 0 to buy the equipment necessary to manufacture the server. The project would require net working capital at the beginning of each year in an amount equal to 10% of the year's projected sales; for example, NWC0 = 10%(Sales1). The servers would sell for $24,000 per unit, and analysts believes that variable costs would amount to $17,500 per unit. After Year 1, the sales price and variable costs will increase at the inflation rate of 3%. The company’s nonvariable costs would be $1 million at Year 1 and would increase with inflation.
The server project would have a life of 4 years. If the project is undertaken, it must be continued for the entire 4 years. Also, the project's returns are expected to be highly correlated with returns on the firm's other assets. The firm believes it could sell 1,000 units per year.
The equipment would be depreciated over a 5-year period, using MACRS rates. The estimated market value of the equipment at the end of the project’s 4-year life is $500,000. Company’s federal-plus-state tax rate is 40%. Its cost of capital is 10% for average-risk projects, defined as projects with a coefficient of variation of NPV between 0.8 and 1.2. Low-risk projects are evaluated with a WACC of 8%, and high-risk projects at 13%.
a. Develop a spreadsheet model, and use it to find the project’s NPV, IRR, and payback.
						Key Output:	NPV =	$5,141,686
Part 1. Input Data							IRR =	21.1%
							MIRR =	15.5%
Equipment cost			$10,000,000
Net WC/Sales			10%		Market value of equipment at Year 4			$500,000
First year sales (in units)			1,000		Tax rate			40%
Sales price per unit			$24,000		WACC			5.91%
Variable cost per unit			$17,500		Inflation			3.0%
Nonvariable costs			$1,000,000
Part 2. Depreciation and Amortization Schedule				Years				Accum'd
Year			Initial Cost	1	2	3	4	Depr'n
Equipment Depr'n Rate				20.0%	32.0%	19.0%	12.0%
Equipment Depr'n, Dollars				$2,000,000	$3,200,000	$1,900,000	$1,200,000	$8,300,000
Ending Bk Val: Cost – Accum Dep'rn			10,000,000				$1,700,000
Part 3. Net Salvage Values, in Year 4					Equipment
Estimated Market Value in Year 4					$500,000
Book Value in Year 4					1,700,000
Expected Gain or Loss					-1,200,000
Taxes paid or tax credit					-480,000
Net cash flow from salvage					$980,000
Part 4. Projected Net Cash Flows (Time line of Annual Cash Flows)
		Years		0	1	2	3	4
Investment Outlays at Time Zero:
Equipment				($10,000,000)
Operating Cash Flows over the Project's Life:
Units sold					1,000	1,000	1,000	1,000
Sales price					$24,000.00	$24,720.00	$25,461.60	$26,225.45
Variable costs					$17,500.00	$18,025.00	$18,565.75	$19,122.72
Sales revenue					$24,000,000	$24,720,000	$25,461,600	$26,225,448
Variable costs					17,500,000	18,025,000	18,565,750	19,122,723
Nonvariable operating costs					1,000,000	1,030,000	1,060,900	1,092,727
Depreciation (equipment)					2,000,000	3,200,000	1,900,000	1,200,000
Oper. income before taxes (EBIT)					$3,500,000	$2,465,000	$3,934,950	$4,809,999
Taxes on operating income (40%)					1,400,000	986,000	1,573,980	1,923,999
After-tax operating income					$2,100,000	$1,479,000	$2,360,970	$2,885,999
Add back depreciation					2,000,000	3,200,000	1,900,000	1,200,000
Operating cash flow					$4,100,000	$4,679,000	$4,260,970	$4,085,999
Terminal Year Cash Flows:
Required level of net working capital				$2,400,000	$2,472,000	$2,546,160	$2,622,545	$0
Required investment in NWC				($2,400,000)	($72,000)	($74,160)	($76,385)	$2,622,545
Terminal Year Cash Flows:
Net salvage value								980,000
Net Cash Flow (Time line of cash flows)				($12,400,000)	$4,028,000	$4,604,840	$4,184,585	$7,688,544
Part 5. Key Output: Appraisal of the Proposed Project
Net Present Value (at 10%)			$5,141,686
IRR			21.09%
MIRR			15.50%
PI formula must be entered
Payback (See calculation below)			2.90		3
Data for Payback Years				0	1	2	3	4
	Net cash flow			(12,400,000)	4,028,000	4,604,840	4,184,585	7,688,544
	Cumulative CF			(12,400,000)	(8,372,000)	(3,767,160)	417,425	8,105,969
	Part of year required for payback				1.00	1.00	0.90	0.00
b. Now conduct a sensitivity analysis to determine the sensitivity of NPV to changes in the sales price, variable costs per unit, and number of units sold wacc and nonvariable costs. Set these variables’ values at 5% and 10% above and below their base-case values. Include a graph in your analysis.
Part 6. Evaluating Risk: Sensitivity Analysis
I. Sensitivity of NPV to Changes in Inputs. Here we use Excel "Data Tables" to find NPVs at different unit sales, WACC, variable costs, sales price and nonvariable costs–changing one variable at a time, holding other things constant.
% Deviation	1st YEAR UNIT SALES			% Deviation	WACC
from	Units	NPV		from		NPV
Base Case	Sold	$5,141,686		Base Case	WACC	$5,141,686
-10%	900	3,779,741		-10%	5.3%
-5%	950	4,460,714		-5%	5.6%
0%	1,000	5,141,686		0%	5.9%
5%	1,050	5,822,658		5%	6.2%
10%	1,100	6,503,630		10%	6.5%
% Deviation	VARIABLE COST			% Deviation	SALES PRICE
from	Variable	NPV		from	Sales	NPV
Base Case	Costs	$5,141,686		Base Case	Price	$5,141,686
-20%	$14,000			-10%	$21,600
-10%	$15,750			-5%	$22,800
0%	$17,500			0%	$24,000
10%	$19,250			5%	$25,200
20%	$21,000			10%	$26,400
				Note about data tables. The data in the column input should NOT be input using a cell reference to the column input cell. For example, the base case number of units sold in Cell B102 should be the number 1000; you should NOT have the formula =D26 in that cell. This is because you'll use D26 as the column input cell in the data table and if Excel tries to iteratively replace Cell D26 with the formula =D26 rather than a series of numbers, Excel will calculate the wrong answer. Unfortunately, Excel won't tell you that there is a problem, so you'll just get the wrong values for the data table!
% Deviation	NONVARIABLE COST
from	Fixed	NPV
Base Case	Costs	$5,141,686
-10%	$900,000
-5%	950,000
0%	1,000,000
5%	1,050,000
10%	1,100,000
	Deviation	NPV at Different Deviations from Base
	from	Sales	Variable		Nonvariable
	Base Case	Price	Cost/Unit	Units Sold	Cost	WACC
	-10%	$0	$0	$3,779,741	$0	$0
	-5%	0	0	4,460,714	0	0
	0%	0	0	5,141,686	0	0
	5%	0	0	5,822,658	0	0
	10%	0	0	6,503,630	0	0
	Range	$0	$0	$2,723,889	$0	$0
c. Now conduct a scenario analysis.
		-10%	-5%		5%	10%
		Worst	Bad	Base	Good	Best
First year sales (in units)		900	950	1,000	1,050	1,100
Sales price per unit		$ 21,600	$ 22,800	$ 24,000	$ 25,200	$ 26,400
Variable cost per unit		$ 19,250	$ 18,375	$ 17,500	$ 16,625	$ 15,750
Nonvariable costs		$ 1,100,000	$ 1,050,000	$ 1,000,000	$ 950,000	$ 900,000
WACC		6.50%	6.21%	5.91%	5.61%	5.32%

Sensitivity Analysis

Sales price -0.1 -0.05 0 0.05 0.1 0 0 0 0 0 VC -0.1 -0.05 0 0.05 0.1 0 0 0 0 0 Units -0.1 -0.05 0 0.05 0.1 3779741.3881332502 4460713.5326771103 5141685.6772209741 5822657.8217648305 6503629.9663086943 Non-var. cost -0.1 -0.05 0 0.05 0.1 0 0 0 0 0 WACC -0.1 -0.05 0 0.05 0.1 0 0 0 0 0

Percentage Deviation from Base

NPV ($)

Scenario Summary MP3

Scenario Summary
			Base	Best	Worst	Good	Bad
			Modified by Garza-Gomez, Xavier	Modified by Garza-Gomez, Xavier	Modified by Garza-Gomez, Xavier	Created by Garza-Gomez, Xavier	Created by Garza-Gomez, Xavier
Changing Cells:
First year sales (in units)	$D$26		1,000	1,100	900	1,050	950
Sales price per unit	$D$27		$24,000	$26,400	$21,600	$25,200	$22,800
Variable cost per unit	$D$28		$17,500	$15,750	$19,250	$16,630	$18,380
Nonvariable costs	$D$29		$1,000,000	$900,000	$1,100,000	$950,000	$1,050,000
WACC	$I$27		5.91%	5.32%	6.50%	5.61%	6.21%
Result Cells:
Net Present Value (at 10%)	$D$76		$5,141,686	$17,025,521	($4,630,931)	$10,805,635	($14,903)
IRR	$D$77		21.09%	49.73%	-9.62%	35.49%	6.16%
MIRR	$D$78		15.50%	29.97%	-5.79%	23.24%	6.18%
PI formula must be entered	$D$79
Payback	$D$80		2.90	1.72	4.00	2.16	3.63
		Probability	0.40	0.10	0.10	0.20	0.20
		Expected NPV	$ 5,454,279		StDev NPV	$ 5,942,170
		Expected IRR	20.8%		StDev IRR	16.2%
		Expected MIRR	14.5%		StDev MIRR	9.7%
		Expected PI	– 0		StDev PI	– 0
		Expected payback	2.89		StDev payback	0.69
			97,714,858,145.74	133,893,621,847,176.00	101,711,475,897,417.00	28,637,001,922,229.00	29,911,960,846,625.50
			0.00	0.08	0.09	0.02	0.02
			0.00	0.02	0.04	0.01	0.01
		Squared deviations	0.00	0.00	0.00	0.00	0.00
		formulas hidden	0.00	1.36	1.23	0.53	0.54
		Students must write the conclusion about the project and comment about its risk

CVM Scenarios

Please highlight excluded cells and/or included cells in your analysis

Operating ratios

Average

Max

Min
Garza-Gomez, Xavier: Formulas must be adjusted to fit the years selected

Range

1/4 of range

Op costs/ sales (excl depreciation)

ERROR:#VALUE!

Depr / NPPE

ERROR:#VALUE!

Cash/sales

ERROR:#VALUE!

Receivables / sales

ERROR:#VALUE!

Inventories / Sales

ERROR:#VALUE!

Net PPE / Sales

ERROR:#VALUE!

Acc payable / Sales

ERROR:#VALUE!

Accruals / Sales

ERROR:#VALUE!

Growth Analysis

3yr growth

5yr growth

7yr growtn

10yr growth

14 yr growth

Audit Status

Not Qualified

Geometric growth

ERROR:#VALUE!

Analyst must pick one of these numbers as expected growth in the near term

Total revenues growth

ERROR:#VALUE!

Arithmetic growth

ERROR:#VALUE!

Current value

Average value

Minor improvement

Mild recession

Major improvement

Continued deterioration

Minor improvement

Mild recession

Major improvement

Continued deterioration

Using most recent values as starting point

Using AVERAGE VALUES as starting point

Op costs/ sales (excl depreciation)

ERROR:#VALUE!

Depr / NPPE

ERROR:#VALUE!

Cash/sales

ERROR:#VALUE!

Receivables / sales

ERROR:#VALUE!

Inventories / Sales

ERROR:#VALUE!

Net PPE / Sales

ERROR:#VALUE!

Acc payable / Sales

ERROR:#VALUE!

Accruals / Sales

ERROR:#VALUE!

Student must decide which subset of scenarios makes more sense (the ones that use average values of the ones that use the most recent value)

Base selected

(1 for current value, 2 for average)

Manually adjusted by analyst

Current value

Average value

Minor improvement

Mild recession

Major improvement

Continued deterioration

Using most recent values as starting point

Op costs/ sales (excl depreciation)

ERROR:#VALUE!

Depr / NPPE

ERROR:#VALUE!

Cash/sales

ERROR:#VALUE!

Receivables / sales

ERROR:#VALUE!

Inventories / Sales

ERROR:#VALUE!

Net PPE / Sales

ERROR:#VALUE!

Acc payable / Sales

ERROR:#VALUE!

Accruals / Sales

ERROR:#VALUE!

Sales growth

Year 1 (short term growth)

ERROR:#VALUE!

Current values or historical average

Year 2 (short term growth)

ERROR:#VALUE!

Automatic formula: simple average of year 1 and year 3

Year 3 (long term growth)

3.5%

4.00%

3.00%

4.5%

2.5%

Manually adjusted by analyst

Year 4 (long term growth)

3.5%

4.00%

3.00%

4.5%

2.5%

Automatic formula: same as year 3

WACC

Most optimistic

best

4.50%

good

3.50%

base

3.50%

Growth

CV model

Chapter 12
Inputs from Income Statement for the Year Ending December 31 (Thousands of Dollars)
	Jan-21
Net Sales	$ 89,597,000						Estimated stock price
Number of shares (in millions)	731,000						ERROR:#VALUE!
Inputs from Balance Sheets for December 31 (Thousands of Dollars)
Marketable Securities	ERROR:#VALUE!		Notes payable		–
			Long-term bonds		13,044,000
			Preferred stock		–
Projected ratios and selected information for the current and projected years are shown below.
Main inputs for the model	Actual	Projected	Projected	Projected	Projected
	Jan-21	Jan-22	Jan-23	Jan-24	Jan-25					Stay the same	Average value	Minor improvement	Mild recession	Major improvement	Continued deterioration
Sales Growth Rate		0.2%	1.9%	3.5%	3.5%
Costs / Sales	49%	49%	49%	49%	49%			Costs / Sales	$B$19	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!
Depreciation / Net PPE	7%	7%	7%	7%	7%			Depreciation / Net PPE	$B$20	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!
Cash / Sales	4%	4.3%	4.3%	4.3%	4.3%			Cash / Sales	$B$21	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!
Acct. Rec. / Sales	11%	11%	11%	11%	11%			Acct. Rec. / Sales	$B$22	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!
Inventories / Sales	0%	0%	0%	0%	0%			Inventories / Sales	$B$23	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!
Net PPE / Sales	115%	115%	115%	115%	115%			Net PPE / Sales	$B$24	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!
Acct. Pay. / Sales	5%	5%	5%	5%	5%			Acct. Pay. / Sales	$B$25	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!
Accruals / Sales	3%	2.8%	2.8%	2.8%	2.8%			Accruals / Sales	$B$26	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!
Tax rate	24%	24%	24%	24%	24%
Weighted average cost of capital (WACC)	9.57%	9.6%	9.6%	9.6%	9.6%			Growth year1	$C$18	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!
								Growth year 2	$D$18	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!	ERROR:#VALUE!
a. Forecast the parts of the income statement and balance sheets necessary to calculate free cash flow.								Long term growth	$E$18	0.0350	0.0350	0.0400	0.0300	0.0450	0.0250
Partial Income Statement for the Year Ending December 31 (Thousands of Dollars)
	Actual	Projected	Projected	Projected	Projected
	Jan-21	Jan-22	Jan-23	Jan-24	Jan-25
Net Sales	$ 89,597,000.0	$ 89,812,032.8	$ 91,491,517.8	$ 94,693,720.9	$ 98,008,001.2
Costs (except depreciation)	$ 44,162,361.3	$ 44,268,351.0	$ 45,096,169.1	$ 46,674,535.0	$ 48,308,143.8
Depreciation	$ 6,881,237.8	$ 6,897,752.7	$ 7,026,740.7	$ 7,272,676.6	$ 7,527,220.3
Total operating costs	$ 51,043,599.1	$ 51,166,103.7	$ 52,122,909.8	$ 53,947,211.7	$ 55,835,364.1
Earning before int. & tax	$ 38,553,400.9	$ 38,645,929.1	$ 39,368,608.0	$ 40,746,509.3	$ 42,172,637.1
Partial Balance Sheets for December 31 (Thousands of Dollars)
	Actual	Projected	Projected	Projected	Projected
Operating Assets	Jan-21	Jan-22	Jan-23	Jan-24	Jan-25
Cash	$ 3,816,832.2	$ 3,825,992.6	$ 3,897,538.7	$ 4,033,952.5	$ 4,175,140.8
Accounts receivable	$ 9,452,483.5	$ 9,475,169.5	$ 9,652,355.1	$ 9,990,187.6	$ 10,339,844.1
Inventories	$ 215,032.8	$ 215,548.9	$ 219,579.6	$ 227,264.9	$ 235,219.2
Net plant and equipment	$ 102,705,041.1	$ 102,951,533.2	$ 104,876,726.9	$ 108,547,412.3	$ 112,346,571.7
Operating Liabilities
Accounts Payable	$ 4,202,099.3	$ 4,212,184.3	$ 4,290,952.2	$ 4,441,135.5	$ 4,596,575.3
Accruals	$ 2,490,796.6	$ 2,496,774.5	$ 2,543,464.2	$ 2,632,485.4	$ 2,724,622.4
b. Calculate free cash flow for each projected year. Also calculate the growth rates of free cash flow each year to ensure that there is constant growth (i.e., the same as the constant growth rate in sales) by the end of the forecast period.
	Actual	Projected	Projected	Projected	Projected
Calculation of FCF	Jan-21	Jan-22	Jan-23	Jan-24	Jan-25
Operating current assets	13,484,348.5	13,516,710.9	13,769,473.4	14,251,405.0	14,750,204.2
Operating current liabilities	6,692,895.9	6,708,958.9	6,834,416.4	7,073,621.0	7,321,197.7
Net operating working capital	6,791,452.6	6,807,752.1	6,935,057.1	7,177,784.0	7,429,006.5
Net PPE	102,705,041.1	102,951,533.2	104,876,726.9	108,547,412.3	112,346,571.7
Net operating capital	109,496,493.7	109,759,285.3	111,811,783.9	115,725,196.4	119,775,578.2
NOPAT	29,210,191.4	29,280,295.8	29,827,837.4	30,871,811.7	31,952,325.1
Investment in operating capital	na	262,791.6	2,052,498.6	3,913,412.4	4,050,381.9
Free cash flow	na	29,017,504.2	27,775,338.7	26,958,399.2	27,901,943.2
Growth in FCF	na	na	-4.3%	-2.9%	3.5%
Growth in sales		0.2%	1.9%	3.5%	3.5%
c. Calculate operating profitability (OP=NOPAT/Sales), capital requirements (CR=Operating capital/Sales), and return on invested capital (ROIC=NOPAT/Operating capital at beginning of year). Based on the spread between ROIC and WACC, do you think that the company will have a positive market value added (MVA= Market value of company – book value of company = Value of operations – Operating capital)?
	Actual	Projected	Projected	Projected	Projected
	Jan-21	Jan-22	Jan-23	Jan-24	Jan-25
Operating profitability (OP=NOPAT/Sales)	32.6%	32.6%	32.6%	32.6%	32.6%
Capital requirement (CR=Operating capital/Sales)	122.2%	122.2%	122.2%	122.2%	122.2%
Return on invested capital (ROIC=NOPAT/Operating capital at start of year)	na	26.7%	27.2%	27.6%	27.6%
Weighted average cost of capital (WACC)	na	9.6%	9.6%	9.6%	9.6%
Spread between ROIC and WACC	na	17.2%	17.6%	18.0%	18.0%
Yes, because the spread is positive, the company should have a positive MVA.
d. Calculate the value of operations and MVA. (Hint: first calculate the horizon value at the end of the forecast period, which is equal to the value of operations at the end of the forecast period.
	Actual	Projected	Projected	Projected	Projected
	Jan-21	Jan-22	Jan-23	Jan-24	Jan-25
Free cash flow		29,017,504.2	27,775,338.7	26,958,399.2	27,901,943.2
Long-term constant growth in FCF					3.5%
Weighted average cost of capital (WACC)	9.6%	9.6%	9.6%	9.6%	9.6%
Horizon value					475,464,765.2
FCF in Years 1-3 and FCF4 + horizon value in Year 4		29,017,504.2	27,775,338.7	26,958,399.2	503,366,708.4
Value of operations (PV of FCF + HV)	419,294,816
Operating capital	109,496,494
Market value added (MVA=Market value of company – book value of company = Value of operations – Operating capital)	309,798,322
e. Calculate the price per share of common equity
	Actual
	Jan-21
Value of Operations	419,294,816
Plus Value of Mkt. Sec.	ERROR:#VALUE!
Total Value of Company	ERROR:#VALUE!
Less Value of Debt	13,044,000
Less Value of Pref.	-0
Value of Common Equity	ERROR:#VALUE!
Divided by number of shares	731,000
Price per share	ERROR:#VALUE!
% Deviation from	Sales growth (LT)	Stock price		% Deviation from	WACC	Stock price
Base Case		ERROR:#VALUE!		Base Case		ERROR:#VALUE!
-10%	3.2%	ERROR:#VALUE!		-10%	6.6%	ERROR:#VALUE!
-5%	3.3%	ERROR:#VALUE!		-5%	6.9%	ERROR:#VALUE!
0%	3.5%	ERROR:#VALUE!		0%	7.3%	ERROR:#VALUE!
5%	3.7%	ERROR:#VALUE!		5%	7.7%	ERROR:#VALUE!
10%	3.9%	ERROR:#VALUE!		10%	8.0%	ERROR:#VALUE!
% Deviation from	Cost/Sales	Stock price		% Deviation from	Net PPE/Sales	Stock price
Base Case		$145.93		Base Case		$145.93
-10%	44.4%	170.98		-10%	103.2%	$152.53
-5%	46.8%	158.45		-5%	108.9%	$149.23
0%	49.3%	145.93		0%	114.6%	$145.93
5%	51.8%	133.40		5%	120.4%	$142.63
10%	54.2%	120.88		10%	126.1%	$139.33
% Deviation from	Dep/Net PPE
Base Case		$145.93
-10%	6.0%	$149.83
-5%	6.4%	$147.88
0%	6.7%	$145.93
5%	7.0%	$143.98
10%	7.4%	$142.02
		Stock price at Different Deviations from Base
	Deviation from Base Case	Net PPE/Sales	Cost/Sales	Sales growth (LT)	Dep/Net PPE	WACC
	-10%	$152.53	$170.98	ERROR:#VALUE!	$149.83	ERROR:#VALUE!
	-5%	$149.23	$158.45	ERROR:#VALUE!	$147.88	ERROR:#VALUE!
	0%	$145.93	$145.93	ERROR:#VALUE!	$145.93	ERROR:#VALUE!
	5%	$142.63	$133.40	ERROR:#VALUE!	$143.98	ERROR:#VALUE!
	10%	$139.33	$120.88	ERROR:#VALUE!	$142.02	ERROR:#VALUE!
	Range	$13	$50	ERROR:#VALUE!	$8	ERROR:#VALUE!

Sensitivity Analysis

Net PPE/Sales -0.1 -0.05 0 0.05 0.1 152.52643767873272 149.22708231523475 145.92772695173679 142.62837158823885 139.32901622474196 Cost/Sales -0.1 -0.05 0 0.05 0.1 170.97722475362562 158.45247585268018 145.92772695173679 133.40297805079331 120.87822914984707 Sales growth (LT) -0.1 -0.05 0 0.05 0.1 0 0 0 0 0 Dep/Net PPE -0.1 -0.05 0 0.05 0.1 149.83085950424231 147.87929322799005 145.92772695173679 143.97616067548361 142.02459439922933 WACC -0.1 -0.05 0 0.05 0.1 0 0 0 0 0

Percentage Deviation from Base

Share price

Scenario Summary MP4

Scenario Summary
		Current Values:	Continuation	Averages	Minor improvement	Mild deterioration	Major improvement	Continued deterioration
			Created by Garza-Gomez, Xavier Modified by Garza-Gomez, Xavier on 4/22/2019 Modified by Garza-Gomez, Xavier on 4/12/2021	Created by Garza-Gomez, Xavier Modified by Garza-Gomez, Xavier on 4/22/2019 Modified by Garza-Gomez, Xavier on 4/12/2021	Created by Garza-Gomez, Xavier Modified by Garza-Gomez, Xavier on 4/22/2019 Modified by Garza-Gomez, Xavier on 4/12/2021	Created by Garza-Gomez, Xavier Modified by Garza-Gomez, Xavier on 4/22/2019 Modified by Garza-Gomez, Xavier on 4/12/2021	Created by Garza-Gomez, Xavier Modified by Garza-Gomez, Xavier on 4/22/2019 Modified by Garza-Gomez, Xavier on 4/12/2021	Created by Garza-Gomez, Xavier Modified by Garza-Gomez, Xavier on 4/22/2019 Modified by Garza-Gomez, Xavier on 4/12/2021
Changing Cells:
Costs / Sales	$B$19	0.4929	0.4929	0.5082	0.4929	0.5001	0.4920	0.5073
Depreciation / Net PPE	$B$20	0.0670	0.0670	0.0624	0.0633	0.0707	0.0595	0.0713
Cash / Sales	$B$21	0.0426	0.0426	0.1034	0.0412	0.1079	0.0412	0.1732
Acct. Rec. / Sales	$B$22	0.1055	0.1055	0.1028	0.0981	0.1129	0.0908	0.1161
Inventories / Sales	$B$23	0.0024	0.0024	0.0043	0.0024	0.0036	0.0024	0.0048
Net PPE / Sales	$B$24	1.1463	1.1463	1.0721	1.1056	1.1463	1.0650	1.1463
Acct. Pay. / Sales	$B$25	0.0469	0.0469	0.0483	0.0511	0.0427	0.0553	0.0405
Accruals / Sales	$B$26	0.0278	0.0278	0.0212	0.0278	0.0252	0.0278	0.0226
Growth year1	$C$18	0.0024	0.0024	0.0037	0.0124	-0.0076	0.0224	-0.0176
Growth year 2	$D$18	0.0187	0.0187	0.0194	0.0262	0.0112	0.0337	0.0037
Long term growth	$E$18	0.0350	0.0350	0.0350	0.0400	0.0300	0.0450	0.0250
Result Cells:
Value of operations	$B$94	141,753,663	141,753,663	140,092,136	165,491,052	121,993,037	198,523,908	107,913,246
Price per share	$B$111	145.93	145.93	143.70	177.73	119.45	222.00	100.58
Notes: Current Values column represents values of changing cells at
time Scenario Summary Report was created.
									Total
		Assigned probabilities	50%	0% Garza-Gomez, Xavier: Must match the scenario chosen in previoust sheets	20%	20%	5%	5%	100% Garza-Gomez, Xavier: Probability must total 100%
		Sq Deviation	7	23	853	846	5397	2299
		Expected price
		148.53
		Standard deviation
		27
			One-standard deviation range
			From	to
			121.55	175.51
			HOLD if current price is in range
			BUY if current price is below
			SELL if current price is above		Current price is	183.65
					Based on standard deviation
					recommendation would be	SELL
		Expected price
		148.53
		Allowed variation
		10%
			Lower limit	Upper limit
			133.68	163.38
			HOLD if current price is in range
			BUY if current price is below
			SELL if current price is above		Current price is	183.65
					Based on allowed variation
					recommendation would be	SELL
			Sensitivity analysis			Student must clearly say if he/she would buy/hold or sell the stock based on all the calculations
						Please include your observations about the range of prices and state how confident you are in your analysis
				Recommendation
			Allowed variation	SELL
			5%	SELL
			10%	SELL
			15%	SELL
			20%	SELL
			25%	HOLD
			30%	HOLD

SAMPLE REPORT FOR MP2

Cost of Capital calculation for company name & logo

Submitted to: Class, professor

By: student name

On: date

FINC 6352 – Financial Management Sample MP2 – Cost of Capital Calculation for MCD

Company Profile Source: https://finance.yahoo.com/

Company name: McDonald’s Inc.

Ticker: MCD

Sector: Consumer Cyclical Industry: Restaurants

Cost of capital components Cost of debt This company has had an implied historical cost of debt around 3%

Cost of debt, historical costs 12/1/2017 12/1/2016 12/1/2015 12/1/2014 12/1/2013

Long-term debt 29536400 25878500 24122100 14989700 14129800 Interest paid 885200 873500 640800 573200 532700

Implied interest rate 3.00% 3.38% 2.66% 3.82% 3.77%

However, historical cost is not relevant. What we need is what the market demands for the debt of this company, which is equal to the cost of new debt issues.

MCD has a Moody’s rating of Baa1 and a S&P’s rating of BBB+

https://www.moodys.com/credit-ratings/McDonalds-Corporation-credit-rating-479500

FINC 6352 – Financial Management Sample MP2 – Cost of Capital Calculation for MCD

https://www.standardandpoors.com/en_US/web/guest/ratings/entity/-/org- details/sectorCode/CORP/entityId/101460

McDonald’s has several issues of debt with maturities ranging from 2020 all the way to 2048

The reference for cost of capital calculations is 10 years. Looking at the different issues we see two of them maturing around 2029

http://finra-markets.morningstar.com/BondCenter/Results.jsp

Average yield for these two issues is 3.6%, which is our estimate for new debt

Cost of preferred stock This company doesn’t use preferred stock to finance its operations so we don’t need to estimate Rp.

https://www.standardandpoors.com/en_US/web/guest/ratings/entity/-/org-details/sectorCode/CORP/entityId/101460

http://finra-markets.morningstar.com/BondCenter/Results.jsp

FINC 6352 – Financial Management Sample MP2 – Cost of Capital Calculation for MCD

Cost of equity We’ll be using three methods to develop our estimate for the cost of equity

DCF approach

This method can only be used for dividend paying companies. The cost of equity is defined as the sum of the dividend yield and the expected growth in dividends.

Dividend yield is directly taken from a website that displays Forward yield

https://finance.yahoo.com/quote/MCD?p=MCD

For MCD, it is estimated to be 2.57%

To estimate growth in dividends, we can use 3 sources:

First is the analysts’ average expectation for earnings growth in the next 5 years.

FINC 6352 – Financial Management Sample MP2 – Cost of Capital Calculation for MCD

https://finance.yahoo.com/quote/MCD/analysis?p=MCD

It is important to note that sometimes analysts are too optimistic and produce estimates that are too high. That is why it is important to use two more methods

Historical growth of dividends

Growth of dividends

Recent growth Last year

Last 2 years

Last 3 years

Last 5 years

Last 7 years

Last 10 years

Dividends declared per common share 6.1% 5.5% 5.3% 4.2% 7.8% 9.8%

From the trend in the last 2 years we could say that it will be above 6%. However, MCD has had negative equity in the last 2 years, indicating high levels of debt, which makes me a bit more conservative in my forecast. My number is 4.2%, which is the average growth in the last 5 years.

The last method to estimate dividend growth is the concept of sustainable growth rate

The formula used is ROE x (1 – Dividend Payout ratio)

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

Dec-99 Dec-02 Dec-05 Dec-08 Dec-11 Dec-14 Dec-17

Growth Dividends declared per common share

FINC 6352 – Financial Management Sample MP2 – Cost of Capital Calculation for MCD

Historical payout ratio 12/1/17 12/1/16 12/1/15 12/1/14 12/1/13 12/1/12 Net income 5192300 4686500 4529300 4757800 5585900 5464800 Common stock dividends 3089200 3058200 3230300 3216100 3114600 2896600

Payout ratio 59.5% 65.3% 71.3% 67.6% 55.8% 53.0%

ROE 12.8% 7.5% 6.2% 6.6%

Sustainable growth NA NA 3.7% 2.4% 2.7% 3.1%

Taking numbers from the statement of cash flows we see that payout has been between 35 and 71%, sustainable growth has moved between 2.4 and 3.7 percent. Excluding the most recent 2 years we get an average of 3% sustainable growth

From the 3 growth estimates and the dividend yield we get our first estimate for the cost of equity

Three estimates of g Analysts earnings estimate 6.55% My estimate based on historical growth 4.20% Sustainable growth 3%

Average 4.56%

Dividend yield 2.57%

Rs 7.13%

FINC 6352 – Financial Management Sample MP2 – Cost of Capital Calculation for MCD

CAPM approach

Formula for the cost of equity is Rs = Rrf + Beta * MRP

Market risk premium is estimated to be 5.5%. For Risk free rate we use the 10 year Treasury bond, which is 2.58%

http://finra-markets.morningstar.com/BondCenter/Default.jsp

For beta we use different sources to estimate it

First, based on historical prices, we calculate returns for the stock and the S&P 500 and run the regression line to estimate beta. Our calculations yield a beta of 0.47

Using three financial websites to obtain market beta we get an average value

y = 0.4752x + 0.011

-0.1

-0.05

0.05

0.1

0.15

0.2

-0.15 -0.1 -0.05 0 0.05 0.1

Ret MCD

http://finra-markets.morningstar.com/BondCenter/Default.jsp

FINC 6352 – Financial Management Sample MP2 – Cost of Capital Calculation for MCD

Average beta estimate

Using 5 years of data 0.475 Yahoo (3 years) 0.39 MSN Money 0.52 Reuters 0.65

Average beta 0.509

Then the estimate of Rs is obtained

Average beta estimate 0.509

Market Risk Premium 5.50%

Risk free rate 2.59% Rs 5.39%

Risk and return of the stock It is important to note that when we estimated historical returns for the most recent 5 years we see that MCD has produced very high returns compared to the market but with a very low beta. This indicates that MCD exceeded market expectations. Looking at total risk of the stock (SD) we only see a small increase in risk.

S&P 500 MCD Yearly average 8.7% 17.4%

Yearly SD 11.2% 13.9% Beta 1.0 0.51

Rd plus a risk premium approach

The third method to obtain Rs is to use the estimate of the cost of debt (Rd) and add a risk premium.

The historical risk premium between the debt and the equity of companies is about 4%

Rd 3.59% Risk Premium 4%

Rs 7.59%

FINC 6352 – Financial Management Sample MP2 – Cost of Capital Calculation for MCD

Capital Structure Given that this company doesn’t have preferred stock, we only need to estimate Wd and Ws. MCD did have preferred stock in the 1990s but they cancelled in 1997 and they haven’t used this method of financing their operations.

Another estimate we need to obtain is the effective tax rate for the firm

We use 5 years of data and calculate the average

Tax rate 12/1/2017 12/1/2016 12/1/2015 12/1/2014 12/1/2013 Income taxes paid 2786300 2387500 1985400 2388300 2546000 Income before provision for income taxes 8573500 6866000 6555700 7372000 8204500 Implied rate 32.5% 34.8% 30.3% 32.4% 31.0%

Average tax rate last 5 years 32.2%

Using book values We observe that since equity is negative in recent years, we can’t estimate weights for those years

Capital structure Based on book value of firm

12/1/2017 12/1/2016 12/1/2015 12/1/2014 12/1/2013 Long-term debt (D) 29536400 25878500 24122100 14989700 14129800 Total shareholders' equity (deficit) (E) -3268000 -2204300 7087900 12853400 16009700 Value of firm (V) NA NA 31210000 27843100 30139500 D/V NA NA 77.3% 53.8% 46.9% E/V NA NA 22.7% 46.2% 53.1% Average for last 5 years D/V 59.3% E/V 40.7%

Using market values The estimation of weights using market values depends on the day that stock price is measured. It is important to decide the day in which market capitalization is measured. A good practice is to measure market cap at the end of the fiscal year. Given MCD has a fiscal year ending in December we’ll use end of December 2018 to estimate market cap.

In addition to the calculation at the end of 2018, we include a historical calculation of weights based on stock prices in December 2014, December 2015, December 2016 and December 2017

FINC 6352 – Financial Management Sample MP2 – Cost of Capital Calculation for MCD

Capital structure Based on market value of firm Calculating historical market equity 12/1/2017 12/1/2016 12/1/2015 12/1/2014 Long-term debt (D) 29536400 25878500 24122100 14989700 Year-end shares outstanding 794100 819300 906800 962900 Stock price end of year 172.12 121.72 118.14 93.70 Market capitalization (E) 136680488 99725197 107129351 90223727 Value of the firm (V) 166216888 125603697 131251451 105213427

D/V 17.8% 20.6% 18.4% 14.2% E/V 82.2% 79.4% 81.6% 85.8% Average for last 4 years D/V 17.7% E/V 82.3% Market capitalization at the close of the most recent fiscal year Based on market value of firm Dec-18 Debt at the close of the fiscal year 31075300 Stock price at close of fiscal year 177.57 Shares outstanding, most recent 765320 Market capitalization (E) 135897878 Value of the firm (V) 166973178 D/V 18.6% E/V 81.4%

It is important to note that though Mergent data ends in 2017, the financial statements for 2018 are available now. Yahoo Finance was used to retrieve the most recent amount for long-term debt and for the number of shares outstanding.

FINC 6352 – Financial Management Sample MP2 – Cost of Capital Calculation for MCD

Weighted Average Cost of Capital The calculations of WACC are shown for both methods of calculating weights

Weighted Average Cost of Capital Tc 32.2% Rd 3.59% 1) DCF Rs 7.13% 3) Rd + RP 7.59% Avg Rs 7.36% Calculating capital structure with book values D/V 59.3% E/V 40.7% Estimate of WACC 4.44% Calculating capital structure with market values D/V 18.6% E/V 81.4% Estimate of WACC 6.45%

As we can see from the results, the WACC obtained with market values is higher than that obtained using book values. This is normally the case given that Rs is normally higher than Rd and Ws is typically lower when we use book values.

The final WACC estimate obtained with market values is more than 2% higher than the one obtained using book values.

Company Profile
Cost of capital components

Cost of debt
Cost of preferred stock
Cost of equity

DCF approach
CAPM approach
Risk and return of the stock
Rd plus a risk premium approach

Capital Structure

Using book values
Using market values
Weighted Average Cost of Capital

Compet1

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comparison

Market value ratios

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Having Trouble Meeting Your Deadline?

Cost of debt

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Cap Bud

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Scenario Summary MP4

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Compet1

ratios company

Compet2

Compet3

asreported

standardized

Ind ratios

charts for ratios

comparison

Market value ratios

Analysis LOW

Having Trouble Meeting Your Deadline?

Cost of debt

Cost of equity

CAPM & beta

WACC

Cap Bud

Scenario Summary MP3

CVM Scenarios

CV model

Scenario Summary MP4

Order a similar assignment, and have writers from our team of experts write it for you, guaranteeing you an A

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