Strategic Management Case Analysis. 4 Questions for Strategic Management and Preparing a Balance Sheet and Income Statement for Projected Financial Statements

Individual Case Analysis 2

Student Name

Course and Section Numbers

Liberty University

Date

Individual Case Analysis 2

Case Analysis of Lowe’s

Instructions: Provide a response to Case 9: Lowe’s Companies, Inc. (p. 451)—answer the 5 questions at the bottom of text page 459 (last paragraph) (David & David, 2015, p. 124).

TIPS:

· Write your responses as if you are preparing the analysis for the chief executive officer (CEO) of Lowe’s. You should convince the CEO to implement your recommendations by providing compelling rationale demonstrated through sound judgment based upon credible sources and appropriate data.

· You will need to use information contained in Chapter 7 and Chapter 8 in order to successfully complete this assignment.

· Cite your sources: Remember to cite your opinion, with proper APA in-text and reference citations.

· Double space your answer to each question and your reference citations. The projected financial statements can be single spaced.

1. Should Lowe's expand into Canada, or review efforts to acquire Rona?

2. Would you recommend Lowe's enter the Australian market with 150 new stores as current planned in an attempt to match Ace's international presence?

3. Would you recommend Lowe's reduce the size of its stores to match Home Depot, and even smaller stores such as Ace and True Value?

4. What do you think are the best strategies for Lowe's to outperform Home Depot as the housing market and world economy continue to improve?

5. Develop the projected financial statements that fully assess and evaluate the impact of your proposed strategy.

TIPS:

· Discuss your financial plan for achieving the recommended strategies.

· Balance sheet

· How will your recommended strategies be funding? Cash, debt, shareholders’ dividends?

· How will assets, liabilities, and shareholders’ equity be affected by your strategies?

· Income Statement

· How will your recommended strategies affect revenue? When will revenues increase?

· What expenses are involved to implement your recommended strategies? When will these costs be incurred? When will these costs decrease or no longer be required?

· Financial ratios: You may need to calculate ratios to project financial data for future years.

· Use the projected balance sheet and income statement data in the textbook.

· You may use the downloadable template provided on the strategyclub.com website, but will need to add the data from the Lowe’s financial statements in the textbook.

· See Chapter 8, pages 260-267), for information about how to project financial statements and the Chapter 8 PowerPoint slides 32-34.

· Use the resources in the Collaboration and Community Center forum of the Discussion Board regarding projecting financial statements.

Financial Plan Narrative

Tip: In this section discuss the assumptions using the tips at the beginning of this section as a general guide. This narrative will be presented in your projected financial statements.

Projected Balance Sheet (Insert projected balance sheet here)

Tip: Balance Sheet (see Exhibit 5, page 457) including assets (e.g., cash, investments, inventory, pre-paid taxes, property); liabilities (e.g., short and long term debt, accounts payable, deferred compensation and benefits, deferred revenue, deferred income taxes); and stockholders’ equity (e.g., stock, retained earnings).

Projected Income Statement (Insert projected income statement here)

Tip: Income Statement (see Exhibit 4, page 456) revenue (e.g., net sales, cost of sales, gross margin); expenses (selling-general and administrative costs, depreciation, interest expense); and pre-tax earnings, net income, and cash dividends per share.

References

David, F. R., & David, F. R. (2015). Strategic management: A competitive advantage approach, concepts and cases (15th ed.). Boston, MA: Pearson. ISBN: 9780133444797