Bundle: Financial & Managerial Accounting, Loose-leaf Version, 13th + CengageNOWv2, 1 term (6 months) Printed Access Card Corporate Financial ... Access Card for Managerial Accounting, 13th
Bundle: Financial & Managerial Accounting, Loose-leaf Version, 13th + CengageNOWv2, 1 term (6 months) Printed Access Card Corporate Financial ... Access Card for Managerial Accounting, 13th
13th Edition
ISBN: 9781305781429
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 1, Problem 1.26EX

Ratio of liabilities to stockholders' equity

The Home Depot, Inc., is the world's largest home improvement retailer and one of the largest retailers in the United States bused on sales volume. The Home Depot operates over 2,200 Home Depot stores that sell a wide assortment of building materials and home improvement and lawn and garden products.

The Home Depot recently reported the following balance sheet data (in millions).

  Year 2 Year 1
Total assets $40,518 $40,125
Total stockholders' equity 22,620 21,236
  • a. Determine the total liabilities at the end of Years 2 and 1
  • b. Determine the ratio of liabilities to stockholders’ equity for Year 2 and Year1 Round to two decimal places.
  • c. What conclusions regarding the margin of protection to the creditors can you draw from (b)?
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Bundle: Financial & Managerial Accounting, Loose-leaf Version, 13th + CengageNOWv2, 1 term (6 months) Printed Access Card Corporate Financial ... Access Card for Managerial Accounting, 13th

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