The Home Depot, Inc. (HD), is the world’s largest home improvement retailer and one of the largest retailers in the United States based on sales volume. Home Depot operates over 2,200 stores that sell a wide assortment of building, home improvement, and lawn and garden items. 

Home Depot recently reported the following end-of-year balance sheet data (in millions):

a. Compute the ratio of liabilities to stockholders’ equity for all three years. Round to two decimal places.

b. What conclusions regarding the margin of protection to creditors can you draw from the trend in this ratio for the three years?

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Year 3 Year 2 Year 1 Total assets $42,549 36,233 $39,946 $40,518 27,996 12,522 Total liabilities 30,624 9,322 Total stockholders' equity 6,316