Survey of Accounting (Accounting I)
Solutions
Survey of Accounting (Accounting I)
Debt and price-earnings ratios
Lowe's Companies Inc. (LOW) operates over 1,800 home improvement retail stores and is a competitor of The Home Depot (HD). The following data (in millions) were adapted from a recent financial statement of Lowe's:
Compute the debt ratio. Round lo one decimal place.
Concept Introduction:
Debt Ratio:
Debt ratio is the relationship between the Total liabilities and Total Assets of a corporation. Debt ratio shows the part of assets financed by debts. It is calculated by dividing total liabilities by total assets. The formula of debt ratio is as follows:
To Calculate:
The Debt Ratios
The Debt ratio is calculated as follows:
| $ in Millions | |
| Total Liabilities (A) |
Chapter 8 Solutions
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