(a)
Concept Introduction:
Debt ratio: Debt ratio measures the percentage of shares financed by debt, the higher debt ratio is considered riskier for the business, because a higher debt ratio indicates a larger portion of assets are funded by external debt, it is computed as total liabilities divided by the total of assets.
The HD’s Debt ratio.
(b)
Concept Introduction:
Debt ratio:
Debt ratio measures the percentage of shares financed by debt, the higher debt ratio is considered riskier for the business, because higher debt ratio indicates a larger portion of assets are funded by external debt, it is computed as total liabilities divided by the total of assets.
The risky ness of the company when compared with the competitor’s debt ratio.

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Chapter 2 Solutions
FINANCIAL & MANAGERIAL ACCOUNTING (LL)(W
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning


