Survey of Accounting (Accounting I)
Solutions
Survey of Accounting (Accounting I)
Debt and price-earnings ratios
The Home Depot. Inc. (HD) operates over 2.200 home improvement retail stores and is a competitor of Lowe's (LOW).
The following data (in millions) were adapted from recent financial statements of The Home Depot.
Compare the results from parts (6) and (7). Comment on any differences.
Concept Introduction:
Price Earnings Ratio:
The price earnings ratio shows the relationship between price of the share and earnings per share. It is calculated with the help of following formula:
To Indicate:
The Comment on the Price Earnings ratios
The Price Earnings ratio for year 2 is calculated as follows:
  
= 104.43/4.74
=22
Chapter 8 Solutions
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