Ratio of Liabilities to Stockholders' Equity The Craft Bin, a major competitor of The Building Store in the home improvement business, operates over 1,600 stores. Craft Bin recently reported the following balance sheet data (in millions):   Year 2 Year 1 Total assets $27,170   $22,656   Total liabilities 14,170   10,856   a.  Determine the total stockholders' equity at the end of Years 2 and 1. Year 2 $fill in the blank 1million Year 1 $fill in the blank 2million b.  Determine the ratio of liabilities to stockholders' equity for Year 2 and Year 1. Round your answers to two decimal places. Year 2 fill in the blank 3 Year 1 fill in the blank 4 c.  Based on (b), which is true regarding the risk to the creditors?

Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter1: Introduction To Accounting And Business
Section: Chapter Questions
Problem 27E
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Ratio of Liabilities to Stockholders' Equity

The Craft Bin, a major competitor of The Building Store in the home improvement business, operates over 1,600 stores. Craft Bin recently reported the following balance sheet data (in millions):

  Year 2 Year 1
Total assets $27,170   $22,656  
Total liabilities 14,170   10,856  

a.  Determine the total stockholders' equity at the end of Years 2 and 1.

Year 2 $fill in the blank 1million
Year 1 $fill in the blank 2million

b.  Determine the ratio of liabilities to stockholders' equity for Year 2 and Year 1. Round your answers to two decimal places.

Year 2 fill in the blank 3
Year 1 fill in the blank 4

c.  Based on (b), which is true regarding the risk to the creditors?
 

d.  The Building Store, 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 Building Store operates over 2,200 Building stores that sell a wide assortment of building materials and home improvement and lawn and garden products.

The Building Store reported the following balance sheet data (in millions)

  Year 2 Year 1
Total assets $27,456   $23,660  
Total stockholders' equity 14,300   13,000  

For Year 2, the creditors of which company are more at risk?

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