Lowe's Companies Inc., a major competitor of The Home Depot in the home improvement business, operates over
Question:
Lowe's Companies Inc., a major competitor of The Home Depot in the home improvement business, operates over 1,800 stores. Lowe's recently reported the following balance sheet data (in millions):
a. Determine the total stockholders' equity at the end of Years 2 and 1.
b. Determine the ratio of liabilities to stockholders' equity for Year 2 and Year 1. Round to two decimal places.
c. What conclusions regarding the risk to the creditors can you draw from (b)?
d. Using the balance sheet data for The Home Depot in Exercise 1-26, how does the ratio of liabilities to stockholders' equity of Lowe's compare to that of The Home Depot?
Balance Sheet Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Transcribed Image Text:
Total assets Total liabilities Year 2 Year 1 $31,827 $32,732 21,859 20,879
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a Year 2 9968 31827 21859 Year 1 11853 32732 20879 b Year 2 219 21859 9968 Year 1 176 20879 1185...View the full answer
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