Wednesday, September 25, 2019

Home Depot VS Lowe's Essay Example | Topics and Well Written Essays - 750 words

Home Depot VS Lowe's - Essay Example Such conditions only intensify the inability of the customers to improve their homes by making purchases in Home Depot or Lowe’s. This is a big risk for both companies (Good fellow, 2013). However, in such a complicated time, Home Depot overcomes financial barriers, and if one compares the change in capitalization, then Home Depot will have more than seventy billion dollars, that is approximately thirty- five percent of the increase in selling. At the same time, Lowes states about thirty billion and fourteen percent of decrease of its selling availabilities. Moreover, the prices at Home Depots were lower, while at Lowe’s they stayed an edge. However, the online availabilities showed that a certain store had lower prices in one area or the item; the other store had the advantage. A price variation, at the same time, revealed great difference between the two retailers and here one could give the edge to Home Depot, especially when the current economic environment squeezed out profits. However, the higher margins give Home Depot possibility to pressure the returns of Lowe’s. Since the return on assets  is essential for discount retailers it is practically impossible to raise prices easily, asset turnover gives the possibility to enhance one’s profitability. ROA indicates how effective one can turn assets into benefit for further profit. While, one wants to see the ROA minimum of seven percent, the advantage here is for Home Depot. For the business the return on equity  measures the way the company is generating good returns of the shareholders’ money. Here again persistence is an important and any number over fifteen percent is determined as exceptional. Other words, the higher percent of persistence, the better the company develops. This is a considerable advantage for Home Depot (Stock, 2013). In addition, according to the Net Promoter Score, special measures that determine a

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