14th Edition

ISBN: 9781305653535

Author: Carl Warren, James M. Reeve, Jonathan Duchac

Publisher: Cengage Learning

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Textbook Question

Chapter 1, Problem 1.2ADM

Home Depot: 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 sales volume. Home Depot operates over 2,200 stores that sell a wide assortment of building, home improvement, and lawn and garden items. Home Depot recently reported the following end-of-year balance sheet data (in millions):

	Year 3	Year 2	Year 1
Total assets	$40,518	$41,804	$40,518
Total stockholders’ equity	12,522	17,777	17,898

A. Determine the total liabilities at the end of Years 1, 2, and 3.
B. Compute the ratio of liabilities to stockholders’ equity for all three years. (Round to two decimal places.)
C. What conclusions regarding the margin of protection to creditors can you draw from the trend in this ratio for the three years?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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Chapter 1, Problem 1.1ADM

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Chapter 1 Solutions

Corporate Financial Accounting

Ch. 1 - Name some users of accounting information.Ch. 1 - Prob. 2DQ Ch. 1 - Prob. 3DQ Ch. 1 - Josh Reilly is the owner of Dispatch Delivery...Ch. 1 - 5. On July 12, Reliable Repair Service extended an...Ch. 1 - Prob. 6DQ Ch. 1 - Describe the difference between an account...Ch. 1 - Prob. 8DQ Ch. 1 - Prob. 9DQ Ch. 1 - The financial statements are interrelated. (A)...

Ch. 1 - Cost principle On June 25, Ritts Roofing extended...Ch. 1 - Prob. 1.2BE Ch. 1 - Transactions Interstate Delivery Service is owned...Ch. 1 - Income statement The revenues and expenses of...Ch. 1 - Prob. 1.5BE Ch. 1 - Balance sheet Using the following data for...Ch. 1 - Statement of cash flows A summary of cash flows...Ch. 1 - Prob. 1.1EX Ch. 1 - Prob. 1.2EX Ch. 1 - Prob. 1.3EX Ch. 1 - Prob. 1.4EX Ch. 1 - Accounting equation The total assets and total...Ch. 1 - Accounting equation Determine the missing amount...Ch. 1 - Prob. 1.7EX Ch. 1 - Asset, liability, and stockholders equity items...Ch. 1 - Effect of transactions on accounting equation What...Ch. 1 - Effect of transactions on accounting equation A. A...Ch. 1 - Prob. 1.11EX Ch. 1 - Transactions The following selected transactions...Ch. 1 - Nature of transactions Teri West operates her own...Ch. 1 - Net income and dividends The income statement for...Ch. 1 - Net income and stockholders equity for four...Ch. 1 - Balance sheet items From the following list of...Ch. 1 - Income statement items From the following list of...Ch. 1 - Prob. 1.18EX Ch. 1 - Prob. 1.19EX Ch. 1 - Prob. 1.20EX Ch. 1 - Balance sheets, net income Financial information...Ch. 1 - Financial statements Each of the following items...Ch. 1 - Prob. 1.23EX Ch. 1 - Prob. 1.24EX Ch. 1 - Financial statements We-Sell Realty, organized as...Ch. 1 - Transactions On September 1 of the current year,...Ch. 1 - Financial statements The amounts of the assets and...Ch. 1 - Financial statements Seth Feye established...Ch. 1 - Transactions; financial statements On August 1,...Ch. 1 - Transactions; financial statements DLite Dry...Ch. 1 - Missing amounts from financial statements The...Ch. 1 - Transactions Amy Austin established an insurance...Ch. 1 - Financial statements The amounts of the assets and...Ch. 1 - Financial statements Jose Loder established Bronco...Ch. 1 - Prob. 1.4BPR Ch. 1 - Transactions; financial statements Bevs Dry...Ch. 1 - Missing amount from financial statements The...Ch. 1 - Peyton Smith enjoys listening to all types of...Ch. 1 - Prob. 1.1ADM Ch. 1 - Home Depot: Ratio of liabilities to stockholders'...Ch. 1 - Lowes: Ratio of liabilities to stockholders equity...Ch. 1 - Prob. 1.4ADM Ch. 1 - Prob. 1.1TIF Ch. 1 - Prob. 1.3TIF

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