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Home Depot: according to calculated accounting ratios, it is safe to assume that the company’s trend analysis is positive in 2011, as compared to 2010 (Home Depot, 2010). This indicates a positive growth in the company’s profitability index. It also means that trading activities within the company have increased in a direct proportion to the amount of working capital. However, stock analysis depicts a negative growth on the part of stock prices indicating a probable drop in future earnings per share held (Miller, 2009). The same is true for Lowes Ltd Co., since there is a tremendous improvement in the profitability index of the company. This is evidently clear by accounting ratios which portray positive results in 2011, as compared to the financial position of the firm in 2011. The P/E ratio is also higher, and it is a probable assumption that the stock price will increase in the future. Therefore, the latter company is the most preferred in terms of investments (Keller, 2007).
Internal Policies and Procedures for Sound Corporate Governance:
Both Companies possess similar governance structures in that the chairman in the board of directors double-ups as the Chief Executive Officer. This means that it is completely impossible to affect management structure of the company, as most crucial decisions rest with the CEO.
However, Home Depot depicts the strength in terms of its financial assets, since it has access to tremendous support from a volunteer-associate program: Team Depot. The Company also receives funds from donors, hence, adding up to its working capital.