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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 based on net 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): 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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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285743615
BuyFind

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285743615

Solutions

Chapter
Section
Chapter 1, Problem 1.26EX
Textbook Problem

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 based on net 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):

Chapter 1, Problem 1.26EX, Ratio of liabilities to stockholders equity The Home Depot, Inc., is the worlds largest home

  1. a. Determine the total liabilities at the end of Years 2 and 1.
  2. b. Determine the ratio of liabilities to stockholders’ equity for Year 2 and Year 1. Round to two decimal places.
  3. c. What conclusions regarding the margin of protection to the creditors can you draw from (b)?

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Chapter 1 Solutions

Accounting (Text Only)
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