Ratio of liabilities to
The Home Depot is the world's largest home improvement retailer and one of the largest retailers in the United States based on net sales volume. The Home De pot 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 tl1e following balance sheet data (in millions):
Year2 | Year1 | |
Total assets | $39,946 | $40,518 |
Total stockholders' equity | 9,322 | 12,522 |
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 Year 1. 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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Chapter 1 Solutions
CENGAGENOW 6 TERMS ACCESS CARD 27TH ED.
- Neiman Marcus Group (NMG) is one of the largest luxury fashion retailers in the world. Kohls Corporation (KSS) sells moderately priced private and national branded products through more than 1,100 department stores located throughout the United States. The current assets and current liabilities at the end of a recent year for both companies are as follows (in millions): a. Would an analysis of working capital between the two companies be meaningful? Explain. b. Compute the quick ratio for both companies. Round to one decimal place. c. Interpret your results.arrow_forwardAnalyze and compare Clorox and Procter & Gamble The Clorox Company (CLX) and The Procter & Gamble Company (PG) produce and sell packaged consumer products around the world. Income and interest expense information from financial statements for a recent year follows (in millions): Clorox Procter & Gamble Interest expense $88 $579 Income before income tax expense 983 13,369 a. Compute the times interest earned for each company. Round to one decimal place. Clorox: fill in the blank 1 Procter & Gamble: fill in the blank 2 b. If you were a lender to these two companies, which one appears to have the greater coverage of interest expense and thus the greater protection for your loan interest?arrow_forwardMotorola Credit Corporation's annual report (dollars in millions) 3311 Net revenue (sales) Net earnings 170 Total assets 2,245 Total liabilities 1,929 Total stockholders' equity 316 a. Find the total debt to total assets ratio. (Round your answer to the nearest hundredth percent.) Total debt to total assets b. Find the return on equity ratio. (Round your answer to the nearest hundredth percent.) Return on equity c. Find the asset turnover ratio. (Round your answer to the nearest cent.) Asset turnover d. Find the profit margin ratio on net sales. (Round your answer to the nearest hundredth percent.) Profit marginarrow_forward
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