Lowe's (FRA:LWE) ROCE %

: 25.79% (As of Jan. 2024)

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ROCE % measures how well a company generates profits from its capital. It is calculated as EBIT divided by Capital Employed, where Capital Employed is calculated as Total Assets minus Total Current Liabilities. Lowe's's annualized ROCE % for the quarter that ended in Jan. 2024 was 25.79%.

Lowe's ROCE % Historical Data

The historical data trend for Lowe's's ROCE % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Lowe's Annual Data

Trend

Jan15

Jan16

Jan17

Jan18

Jan19

Jan20

Jan21

Jan22

Jan23

Jan24

ROCE %

28.99

31.51

47.49

42.50

46.00

Lowe's Quarterly Data
	Apr19	Jul19	Oct19	Jan20	Apr20	Jul20	Oct20	Jan21	Apr21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Jan23	Apr23	Jul23	Oct23	Jan24
ROCE %																26.09	51.50	58.25	42.13	25.79

Lowe's ROCE % Calculation

Lowe's's annualized ROCE % for the fiscal year that ended in Jan. 2024 is calculated as:

ROCE %	=	EBIT	/	( (Capital Employed	+	Capital Employed)	/ count )
		(A: Jan. 2024 )		(A: Jan. 2023 )		(A: Jan. 2024 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(A: Jan. 2024 )		(A: Jan. 2023 )		(A: Jan. 2024 )
	=	10702.044	/	( ( (40561.024 - 18106.208)	+	(38367.81 - 14291.424) )	/ 2 )
	=	10702.044	/	( (22454.816	+	24076.386)	/ 2 )
	=	10702.044	/	23265.601
	=	46.00 %

Lowe's's ROCE % of for the quarter that ended in Jan. 2024 is calculated as:

ROCE %	=	EBIT ⁽¹⁾	/	( (Capital Employed	+	Capital Employed)	/ count )
		(Q: Jan. 2024 )		(Q: Oct. 2023 )		(Q: Jan. 2024 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(Q: Jan. 2024 )		(Q: Oct. 2023 )		(Q: Jan. 2024 )
	=	6282.792	/	( ( (40265.493 - 15621.712)	+	(38367.81 - 14291.424) )	/ 2 )
	=	6282.792	/	( ( 24643.781	+	24076.386 )	/ 2 )
	=	6282.792	/	24360.0835
	=	25.79 %

(1) Note: The EBIT data used here is four times the quarterly (Jan. 2024) EBIT data.

Lowe's (FRA:LWE) ROCE % Explanation

ROCE % can be especially useful when comparing the performance of capital-intensive companies. Unlike ROE %, which indicates the profitability of Shareholders Equity, ROCE % also considers long-term debt in Capital Employed. This can be helpful when analyzing companies with significant debt, as the result is neutralized by taking debt into consideration.

Generally speaking, a higher ROCE % indicates a stonger profitability for a company. Moreover, it is important to look at the ratio from a long term perspective. Investors tend to favor companies with stable and rising ROCE % trend over those with volatile ones.

Lowe's ROCE % Related Terms

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Lowe's (FRA:LWE) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Lowe's Companies Inc (FRA:LWE) » Definitions » ROCE %

Comparable Companies

Traded in Other Exchanges

LOW:USA LOW:Mexico LWE:Germany LOWC34:Brazil

Address

1000 Lowes Boulevard, Mooresville, NC, USA, 28117

Website

https://www.lowes.com

Lowe's is the second-largest home improvement retailer in the world, operating more than 1,700 stores in the United States, after the 2023 divestiture of its Canadian locations (RONA, Lowe's Canada, Réno-Dépôt, and Dick's Lumber). The firm's stores offer products and services for home decorating, maintenance, repair, and remodeling, with maintenance and repair accounting for two thirds of products sold. Lowe's targets retail do-it-yourself (around 75% of sales) and do-it-for-me customers as well as commercial and professional business clients (around 25% of sales). We estimate Lowe's captures a low-double-digit share of the domestic home improvement market, based on U.S. Census data and management's market size estimates.

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