   Chapter 8, Problem 8.9.3MBA

Chapter
Section
Textbook Problem

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 ratio of liabilities to Stockholders' equity. Round to one decimal place.

To determine

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:

Debt Ratio = Total LiabilitiesTotal Assets

To Calculate:

The Ratios of Liabilities to Stockholder's Equity

Explanation

The Ratios of Liabilities to Stockholder's Equity is calculated as follows:

 \$ in Millions Stockholder's Equity (A)

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