Use the foregoing financial statements of Lowe's Companies.

1. Compute the debt ratio at December 31, 20X4. 

2. Is Lowe's ability to pay its liabilities strong or weak? Explain your reasoning, 

Lowe's Companies, the home-improvement-store chain, reported these summarized figures (in billions):

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Net sales LOWE'S COMPANIES Income Statement (Adapted) Year Ended January 30, 20X4 Cost of goods sold Interest expense All other expenses Net income $30.8 21.2 .2 7.5 $ 1.9