Interest rates in the United States were at historic lows for much of the period from 2013 through 2016. The economy was slowly recovering from the recession of 2008 and 2009, and the Federal Reserve kept interest rates low to encourage this recovery. Because of these low interest rates, many companies increased their long-term financing from debt, while lowering their financing with owners’ equity. Home Depot, Inc., the building supplies company, was one of these firms. Use Home Depot’s 2016 Form 10-K to obtain the data for 2015 and 2016, and its 2014 Form 10-K to obtain the data for 2013 and 2014. Home Depot ends its fiscal year in late January or early February, so for the purposes of this assignment, the fiscal year ending on January 29, 2017, is considered the company’s 2016 fiscal year. All other fiscal years are treated the same, so 2013 will be the year ended February 2, 2014. To obtain the 10-Ks, you can either use the EDGAR system, following the instructions in Appendix A, or they can be found on the company’s website. 

Required
a. For each year, 2013 through 2016, calculate the following ratios:
(1) Debt to assets
(2) Return on assets
(3) Return on equity
b. List the company’s interest expense for each year from 2013 through 2016.
c. Write a brief memorandum discussing all of the effects that Home Depot’s strategy of increasing its financing with debt had on the company from 2013 through 2016.