GURUFOCUS.COM » STOCK LIST » USA » NYSE » Lowe's Companies Inc (NYSE:LOW) » Definitions » Financial Strength
Switch to:

Lowe's (NYSE:LOW) Financial Strength

: 5 (As of Jul. 2023)
View and export this data going back to 1979. Start your Free Trial

Lowe's has the Financial Strength Rank of 5.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

Lowe's's Interest Coverage for the quarter that ended in Jul. 2023 was 10.34. Lowe's's debt to revenue ratio for the quarter that ended in Jul. 2023 was 0.41. As of today, Lowe's's Altman Z-Score is 3.67.


Competitive Comparison

For the Home Improvement Retail subindustry, Lowe's's Financial Strength, along with its competitors' market caps and Financial Strength data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Lowe's Financial Strength Distribution

For the Retail - Cyclical industry and Consumer Cyclical sector, Lowe's's Financial Strength distribution charts can be found below:

* The bar in red indicates where Lowe's's Financial Strength falls into.



Lowe's Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

Lowe's's Interest Expense for the months ended in Jul. 2023 was $-376 Mil. Its Operating Income for the months ended in Jul. 2023 was $3,886 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jul. 2023 was $39,450 Mil.

Lowe's's Interest Coverage for the quarter that ended in Jul. 2023 is

Interest Coverage=-1*Operating Income (Q: Jul. 2023 )/Interest Expense (Q: Jul. 2023 )
=-1*3886/-376
=10.34

The higher the ratio, the stronger the company's financial strength is.

2. Debt to revenue ratio. The lower, the better.

Lowe's's Debt to Revenue Ratio for the quarter that ended in Jul. 2023 is

Debt to Revenue Ratio=Total Debt (Q: Jul. 2023 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(1126 + 39450) / 99824
=0.41

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

Lowe's has a Z-score of 3.67, indicating it is in Safe Zones. This implies the Z-Score is strong.

Good Sign:

Altman Z-score of 3.67 is strong.

* 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.


Lowe's  (NYSE:LOW) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

Lowe's has the Financial Strength Rank of 5.


Lowe's Financial Strength Related Terms

Thank you for viewing the detailed overview of Lowe's's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.


Lowe's (NYSE:LOW) Business Description

Lowe's logo
Address
1000 Lowes Boulevard, Mooresville, NC, USA, 28117
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.
Executives
Quonta D Vance officer: EVP, Pro & Home Services 1000 LOWE'S BOULEVARD, MOORESVILLE NC 28117
Juliette Williams Pryor officer: EVP, CLO & Corp. Sec. 1000 LOWE'S BOULEVARD, MOORESVILLE NC 28117
Scott H Baxter director 400 NORTH ELM STREET, GREENSBORO NC 27401
Taylor Colleen director C/O BILL.COM HOLDINGS, INC., 1800 EMBARCADERO ROAD, PALO ALTO CA 94303
Brandon J Sink officer: EVP, Chief Financial Officer 1000 LOWE'S BOULEVARD, MOORESVILLE NC 28117
Stone West Mary E director C/O HASBRO, INC., 1011 NEWPORT AVENUE, PAWTUCKET RI 02861
Daniel J Heinrich director CLOROX CO, 1221 BROADWAY, OAKLAND CA 94612
Griggs Dan Clayton Jr officer: Vice President, CAO 1000 LOWES BOULEVARD, MOORESVILLE NC 28117
Janice Dupre Little officer: EVP Human Resources 1000 LOWES BOULEVARD, MOORESVILLE NC 28117
Marisa F Thalberg officer: EVP Chief Brand & Mktg Officer 1000 LOWE'S BOULEVARD, MOORESVILLE NC 28117
David M Denton officer: EVP, Chief Financial Officer 1000 LOWE'S BOULEVARD, MOORESVILLE NC 28117
Seemantini Godbole officer: EVP, Chief Information Officer 1000 LOWE'S BOULEVARD, MOORESVILLE NC 28117
Tiffany L Mason officer: Interim CFO & SVP 440 S. CHURCH STREET, SUITE 700, CHARLOTTE NC 28202
Joseph Michael Mcfarland officer: EVP, Stores 1000 LOWE'S BOULEVARD, MOORESVILLE NC 28117
William P Boltz officer: EVP, Merchandising 1000 LOWE'S BOULEVARD, MOORESVILLE NC 28117