Financial & Managerial Accounting
14th Edition
ISBN: 9781337515498
Author: WARREN
Publisher: Cengage
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Chapter 1, Problem 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
| 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?
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Chapter 1 Solutions
Financial & Managerial Accounting
Ch. 1 - Name some users of accounting information.Ch. 1 - Prob. 2DQCh. 1 - Prob. 3DQCh. 1 - Prob. 4DQCh. 1 - On July 12, Reliable Repair Service extended an...Ch. 1 - Prob. 6DQCh. 1 - Describe the difference between an account...Ch. 1 - A business had revenues of 679,000 and operating...Ch. 1 - Prob. 9DQCh. 1 - The financial statements are interrelated. What...
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