Chapter 1 1 EX01.18 Analyze the Home Depot for three years 2. PR.01.05A BLANKSHEET 3. MAD.01.02 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): Year 3 Year 2 Year 1 $42,549 $39,946 $40,518 36,23330,624 27,996 Total stockholders' equity 6,3169,322 12,522 a. Compute the ratio of liabilities to stockholders' equity for all three years. (Round to two decimal places.) Liabilities to stockholders' equity Total assets Total liabilities Year 1 Year 2 b. Which of the following statements is true? 1. A high ratio of liabilities to stockholders equity is favorable to the creditors. 2. A low ratio of liabilities to stockholders equity is favorable to the creditors. 3. A high ratio of liabilities to stockholders equity is favorable to the stockholders. 4. A low ratio of liabilities to stockholders equity is favorable to the stockholders