Refer to the financial statements of The Home Depot in Appendix A and Lowe’s in Appendix B at the end of this book, or download the annual reports from the Cases section in the Connect library.
1. Calculate and express as a percentage, the companies’ debt-to-assets ratios using amounts reported in the financial statements for the year ending in early 2014. What do the differences in this ratio suggest about the companies’ reliance on creditors? Does it appear that Lowe’s or The Home Depot has a riskier financing strategy?
2. Calculate, to two decimal places, the companies’ times interest earned ratios for the years ending in early 2014. Does it appear that Lowe’s or The Home Depot will be better able to meet future interest obligations as they become payable?

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