The Home Depot, Inc. (HD), is the world's largest home improvement retailer and one of the largest retailers in the United States based on sales volume. Home Depot operates over 2,200 stores that sell a wide assortment of building, home improvement, and lawn and garden items. Home Depot recently reported the following end-of-year balance sheet data (in millions): Year 3 Year 2 Year 1 Total assets $42,549 $39,946 $40,518 Total liabilities 36,233 30,624 27,996 Total stockholders' equity 6,316 9,322 12,522 Compute the ratio of liabilities to stockholders' equity for all three years. Round to two dec- imal places. a. b. What conclusions regarding the margin of protection to creditors can you draw from the trend in this ratio for the three years?

The Home Depot, Inc. (HD), is the world's largest home improvement retailer and one of the largest retailers in the United States based on sales volume. Home Depot operates over 2,200 stores that sell a wide assortment of building, home improvement, and lawn and garden items. Home Depot recently reported the following end-of-year balance sheet data (in millions): Year 3 Year 2 Year 1 Total assets $42,549 $39,946 $40,518 Total liabilities 36,233 30,624 27,996 Total stockholders' equity 6,316 9,322 12,522 Compute the ratio of liabilities to stockholders' equity for all three years. Round to two dec- imal places. a. b. What conclusions regarding the margin of protection to creditors can you draw from the trend in this ratio for the three years?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Tools For All (TFA) is a global supplier of tools and related accessories. The following data were taken from the company’s 2018 annual report. Dollar amounts are in millions. Fiscal Years Ending December 31, 2018 December 31, 2017 Current assets $4,547.8 $4,500.0 Current liabilities 4,091.2 4,389.9 Total assets 19,744.0 19,506.9 Total liabilities 11,170.4 10,423.5 Required a. Compute TFA’s current ratios for 2018 and 2017. (Round your answers to 2 decimal places.) b. Compute TFA’s debt-to-assets ratios for 2018 and 2017. (Round your answers to 2 decimal places.) c. Based on the ratios computed in Requirements a and b, did TFA’s liquidity get better or worse from 2017 to 2018? d. Based on the ratios computed in Requirements a and b, did TFA’s solvency get better or worse from 2017 to 2018?
(6) Sprint Corporation is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 32.6 million direct subscribers (accounts) that generated revenue of $33,600 million. Costs and expenses for the year were as follows (in millions): Cost of revenue $13,389 Selling, general, and administrative expenses 7,774 Depreciation 8,783 Assume that 70% of the cost of revenue and 30% of the selling, general, and administrative expenses are variable to the number of direct subscribers (accounts). In part (a) and (b), round all interim calculations and final answers to one decimal place. a. What is Sprint’s break-even number of accounts, using the data and assumptions given?fill in the blank 1 million accounts b. How much revenue per account would be sufficient for Sprint to break even if the number of accounts remained constant?$fill in the blank 2 million per account
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Below is financial information for the last year for a company that has a number of fast-food stores: Revenue from operations: $10,450,200 9,927,690 Operating costs: Cost of capital: RRR: 12% 15% Average assets: $4,180,080 Required: Calculate several measures that can be used for the financial perspective of a BSC.
The Hopewell Pharmaceutical Company’s balance sheet and income statement for last year are as follows: Balance Sheet (in Millions of Dollars) Assets Liabilities and Equity Cash and marketable securities $900 Accounts payable*** $900 Accounts receivable* 1,100 Accrued liabilities Inventories** 700 (salaries and benefits) 400 Other current assets 200 Other current liabilities 600 Total current assets $2,900 Total current liabilities $1,900 Plant and equipment (net) 2,700 Long-term debt and other Other assets 800 liabilities 700 Total assets $6,400 Common stock 1,300 Retained earnings 2,500 Total stockholders’ equity $3,800 Total liabilities and equity $6,400 *Assume that average accounts receivable are the same as ending accounts receivable. **Assume that average inventory over the year was the same as ending inventory. ***Assume that average accounts payable are the same…
Rotorua Products sells agricultural products in the burgeoning Asian market. The company's current assets, current liabilities, and sales over the last five years (Year 5 is the most recent year) are as follows: Sales Cash Accounts receivable, net Inventory Total current assets Current liabilities Sales Current assets: Cash Accounts receivable, net Inventory Total current assets Current liabilities Year 11 Year 2 Year 3 Year 4 Year 5 $4,545,400 $4,737,850 $ 5,126,380 $5,421,900 $5,776,190 Year 1 $ 88,854 418,283 800,380 $ 1,307,517 $ 313,578 Required: 1. Express all of the asset, liability, and sales data in trend percentages. Use Year 1 as the base year. Note: Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3). % % % % % % Year 2 $ 88,845 $ 77,057 435,833 587,279 $ 90,380 417,076 876,061 $1,383,517 $ 1,350,248 $ 1,466,414 $1,552,502 $ 346,822 $ 336,685 $ 335,107 $ 390,612 825,570 882,078 % % % % % % Year 3 % % % % Year 4 % % $ 80,928 569,984…
1985, Inc. operates three geographic regions: The Color Purple, The Goonies, and The Breakfast Club. Each region is considered an investment center for 1985. The following data was reported for the year just ended: The Color Purple The Goonies The Breakfast Club Operating Income Sales Revenue Invested Assets $23,600 $16,160 $5,020 $7,790 $3,050 $1,970 $29,962 $15,482 $15,335 Assume the company's minimum acceptable rate of return is 12%. An investment opportunity requiring a $10,000 investment has been identified by the company. The investment is expected to earn $1,250. Which of the following statements is correct? If the managers of each region receive a bonus based on their ability to exceed their region's prior period ROI, all managers would accept the investment opportunity. If the investment opportunity is accepted by any of the managers, their region's residual increase will increase by $50. Using ROI as the performance evaluation tool would ensure goal congruence is achieved.…
Chipotle Mexican Grill began with a single location in 1993 and now operates more than 2,450 restaurants. Adapted versions of the company's income statements (in $000s) are as follows: 2017 2016 Revenue $4476,412 $3,904.384 Restaurant operating costs Food, beverage, and packaging 1.535.428 1,365,580 Labor 1,205,992 1.105,001 Occupancy 327,132 293,636 Other operating costs 651.644 641.953 General and administrative expenses 296,388 276,240 Depreciation and amortization 163,348 146,368 Pre-opening costs 12,341 17,162 Loss on disposal of assets 13,345 23,877 Total operating expenses 4,205,618 3,869,817 Income from operations 270,794 34,567 Interest and other income (expense), net 4,949 4,172 Income before income taxes 275,743 38,739 Provision for income taxes 99,490 15,801 Net income $176,253 $22,938 Prepare a common-size income statement for each year. (Round answers to 1 decimal place, e.g. 50.1%.) 2017 2016 Revenue Restaurant operating costs Food, beverage, and packaging Labor…
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Analyze Deere & Company Deere & Company (DE) manufactures and distributes farm and construction machinery that it sells around the world. In addition to its manufacturing operations, Deere's credit division loans money to customers to finance the purchase of their farm and construction equipment. The following information is available for three recent years (in millions except per-share amounts): Year 3 Year 2 Year 1 Net income (loss) Preferred dividends $1,523.9 $1,940.0 $3,161.7 $ 0.00 $ 763.7 $ 680.0 $ 664.0 $0.00 $ 0.00 Interest expense Shares outstanding for computing earnings per share 315 334 363 Cash dividend per share $ 2.40 $ 2.40 $ 2.22 $ 57,965 $ 59,642 $ 60,429 $ 6,644 $ 7,912 $ 9,667 $ 92.03 $ 81.10 $ 85.58 Average total assets Average stockholders' equity Average stock price per share 1. Calculate the following ratios for each year (Round ratios and percentages to one decimal place, except for per-share amounts. Round per-share amounts to two decimal places.): Year 3…
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