Selected financial data for two competitors in the construction supply industry are provided as follows:

Required:
1. Calculate the debt to equity ratio for both companies. Which company has the higher ratio?
2. Calculate the return on assets and the return on equity for both companies. Which company has the better profitability ratios?
3. Calculate the times interest earned ratio for both companies Lowes. Which company is better able to meet interest payments as they become due?

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Company IB 2015 (S in millions) Companv A 2015 2014 2014 Total assets Total liabilities Total stockholders equity Sales Interest expense Tax expense Net income S40,877 S41,164 S33,005 S32,625 21,484 23,37 13,936 14,570 $19,393 $17,777 S19,069 S18,055 $66,176 676 1,362 $2,661 S47,220 383 1,042 1,783