Home Depot and Lowe\'s are two companies in the same industry. Comparative data

Question

Home Depot and Lowe's are two companies in the same industry. Comparative data for two years are given below:

Home Lowe's

Depot

Sales revenue 20X1 $905,520 $1,090,000

20X6 1,950,000 2,962,500

Number of employees 20X1 1,750 2,500

20X6 2,250 4,375

Assume each 20X1 dollar is equivalent to 1.90 of each 20X6 dollar due to inflation.

Required:

A) After considering inflation, compute the revenue per employee for each company for 20X1 and 20X6.

B) What is the change in productivity between the five years for each company?. Comparative data for two years are

given below:

Home Lowe's

Depot

Sales revenue 20X1 $905,520 $1,090,000

20X6 1,950,000 2,962,500

Number of employees 20X1 1,750 2,500

20X6 2,250 4,375

Assume each 20X1 dollar is equivalent to 1.90 of each 20X6 dollar due to inflation.

Required:

A) After considering inflation, compute the revenue per employee for each company for 20X1 and 20X6.

B) What is the change in productivity between the five years for each company?

Explanation / Answer

a. Home:

20X1: 905,520 / 1,750 = 517 orders per employee

20X6: 1,950,000 / 2,250 = 867 orders per employee

Lowe:

20X1: 1,090,000 / 2,500 = 436 orders per employee

20X6: 2,962,500 / 4,375 = 677 orders per employee

b. Both theCompany

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