1. Calculate and express as a percentage the companies’ debt-to-assets ratios using amounts reported in the financial statements for fiscal 2016, which ends in early 2017. 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 fiscal 2016, which ends in early 2017. (For the interest expense part of this ratio, use interest expense after subtracting interest income earned by The Home Depot and use the net Interest Expense of Lowe’s.) Does it appear that Lowe’s or The Home Depot will be better able to meet future interest obligations as they become payable?

Refer to the financial statements of The Home Depot in Appendix A and Lowe’s in Appendix B at the end of this book. (Note: Fiscal 2016 for The Home Depot runs from February 1, 2016, to January 29, 2017. Fiscal 2016 for Lowe’s runs from January 30, 2016, to February 3, 2017.