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Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac
Edition 26ISBN: 978-1285743615Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac
Edition 26ISBN: 978-1285743615 Exercise 44
Ratio of liabilities to stockholders' equity
Lowe's Companies Inc., a major competitor of The Home Depot in the home improvement business, operates over 1,700 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
Lowe's Companies Inc., a major competitor of The Home Depot in the home improvement business, operates over 1,700 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
Explanation
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Verified
Answer: a.
Accounting equation:
The ac...
Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac
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