Ratio of liabilities to stockholders’ equity Lowe’s Companies Inc.
January 8th, 2018
Ratio of liabilities to stockholders’ equityLowe’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):Year 2Year 1Total assets$33,699$33,005Total liabilities15,58713,936a. Determine the total stockholders’ equity as of 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?
