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Introduction Ratio Analysis Asset Turnover Ratio Table 1 Asset Turnover Ratios Graph 1-Asset Turnover Ratio {draw:frame} Net Profit Margin The net profit margin is a percentage that measures net income per dollar of sales. The net profit margin is a good indicator of a company’s ability to control cost and their pricing policies. The percentage of the net profit margin can show how much a company makes for every dollar it produces in revenue. A low profit margin indicates a higher risk that a decline in sales will erase the company’s profits and result in a net loss. Lowe’s Corporation had an increase of 0.6% from 2004 to 2007, but experienced a big decrease in 2008 by 0.8 %. The following table and graph will show the increase and drastic decrease that Lowe’s Corporation experienced from 2004 to 2008. Table 2 Net Profit Margin Graph 2-Net Profit Margin {draw:frame} Debt Ratio Table 3 Debt Ratio Graph 3-Debt Ratio {draw:frame} Return on Assets (ROA) Table 4 Return on Assets Graph 4-Return on Assets {draw:frame} Return on Equity (ROE) The return on equity (ROE) is a percentage that measures how well a company uses investment dollars to produce earnings growth. The decomposition of ROE is the ROA multiplied by the equity multiplier. The equity multiplier is calculated by dividing the total assets by the common equity. This is an important number for the shareholders because it shows how much profit a company generates with the money that the shareholders have invested in that company. Lowe’s Corporation had a continuous increase in their ROE from 2004 to 2007 then experienced a 2.3 ...