Menard, Inc. - Page 13

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                                                     APPENDIX                                                          

                   Petitioners’ and Respondent’s Experts’ Common Measures of                                           
                     Comparison Group Companies’ Profitability for TYE 1998                                            

                                            Dr. Hakala’s Measures                                                      

                                  Gross       Revenue       Net          Return on        Return on                    
                                Revenue1      Growth2       Income3      Equity4          Assets5                      
               Menards          $3.420        12.7%         $0.205       18.8%            14.2%                        
               Home Depot       24.156        23.7          1.160        16.1             10.3                         
               Kohl’s           3.060         28.1          0.141        14.8             8.7                          
               Lowe’s           10.137        17.9          0.357        13.7             6.8                          
               Staples          5.732         27.6          0.168        15.3             6.4                          
               Target           27.757        9.4           0.751        16.7             5.3                          
                                            Mr. Rowley’s Measures                                                      
                         Net       Net Sales     Net         Return on       Return on       Return on                 
                         Sales6    Growth8        Income9    Avg. Equity10   Beg. Equity11   Avg. Assets12             
               Menards   $3.420    12.7%         $0.204      20.6%           22.9%           15.6%                     
               Home                                                                                               
               Depot     24.156    23.7          1.160       17.8            19.5            11.3                      
               Kohl’s    3.060     28.1          0.141       19.2            27.3            10.3                      
               Lowe’s    10.137    17.9          0.357       14.8            16.1            7.4                       
               Staples   75.181    30.6          0.131       15.1            17.2            6.2                       
               Target    27.757    9.4           0.751       19.6            20.7            5.5                       
                     1Gross revenue is total gross sales in billions, rounded to the nearest                           
              million, before the subtraction of sales costs.                                                          
                     2Revenue growth is the percent change in gross revenue from the preceding                         
              fiscal year.                                                                                             
                     3Net income in billions, rounded to the nearest million, was computed after                       
              taxes. 4Return on equity equals net income divided by shareholders equity and                            
              multiplied by 100 percent.                                                                               
                     5Return on assets equals net income divided by total assets and multiplied by                     
              100 percent.                                                                                             
                     6According to Menards’s financial statements, these numbers are actually gross                    
              sales in billions, rounded to the nearest million.                                                       
                     7For the values of Staples’s gross revenue, revenue growth, and net income in                     
              TYE 1998, a slight discrepancy existed between Mr. Rowley’s and Dr. Hakala’s expert                      
              reports.  Neither party explained the discrepancy.                                                       
                     8According to Menards’s financial statements, these numbers are actually gross                    
              sales growth.                                                                                            
                     9Net income in billions, rounded to the nearest million, was computed after                       
              taxes. 10Mr. Rowley did not explain how he arrived at these numbers for return on                        
              average equity.                                                                                          
                     11Mr. Rowley did not explain how he arrived at these numbers for return on                        
              beginning equity.                                                                                        
                     12Mr. Rowley did not explain how he arrived at these numbers for return on                        
              average assets.                                                                                          






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