Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 40

Comparing Financial Information
Refer to the financial statements of The Home Depot in Appendix A and Lowe's in Appendix B at the end of this book, or download the annual reports from the Cases section of the text's Web site at www.mhhe.com/phillips4e.
Required:
1. Calculate, to two decimal places, the companies' quick ratios using amounts reported in the financial statements for the years ending in early 2011 and 2010. What do the changes in this ratio suggest about the companies' ability to quickly pay their liabilities Does it appear that Lowe's or The Home Depot is in a less secure position
2. Calculate, to two decimal places, the companies' times interest earned ratios for the years ending in early 2012. Does it appear that Lowe's or The Home Depot will be better able to meet future interest obligations as they become payable