Compute the following three ratios for The Home Depots year ended January 29, 2017: (i) fixed asset turnover, (ii) days to sell, and (iii) debt-to-assets. To calculate the ratios, use the Fiscal 2016 financial statements of The Home Depot in Appendix A at the end of this book. (Note: Fiscal 2016 for The Home Depot runs from February 1, 2016, to January 29, 2017. As with many retail companies, The Home Depot labels the period Fiscal 2016 even though it ends in the 2017 calendar year. The label Fiscal 2016 is appropriate because Fiscal 2016 includes 11 months from the 2016 calendar year. The Home Depot explains its choice of fiscal period in Note 1 to its financial statements.) (Use 365 days in a year. Round intermediate calculations to 2 decimal places. Round fixed asset turnover and debt-to-assets final ratios to 2 decimal places. Round days to sell ratio to 1 decimal place.)

• a. 2.37; 71.4; 0.90

• b. 2.37; 47.0; 0.52

• c. 4.29; 47.0; 0.90

• d. 4.29; 71.4; 0.90

Jan. 29, 2017 Feb. 1, 2015 "Fiscal 2014' Jan. 31, 2016 amounts in millions "Fiscal 2016" "Fiscal 2015" CASH FLOWS FROM OPERATING ACTIVITIES: Net Earnings $7,957 $7,009 $6,345 Reconciliation of Net Earnings to Net Cash Provided by Operating Activities: Depreciation and Amortization 1,973 1,863 1,786 Stock-Based Compensation Expense 267 244 225 (323) Gain on Sales of Investments (144) f the effects of acquisitions Changes in Assets and Liabilities, net Receivables, net (138) (181) (81) Merchandise Inventories (769) (546) (124) (48) Other Current Assets (5) (199) Accounts Payable and Accrued Expenses 446 888 244 Deferred Revenue 99 109 146 Income Taxes Payable 109 154 168 Deferred Income Taxes (117) 15 159 Other 4 (33) (104) Net Cash Provided by Operating Activities 9,783 9.373 8.242 CASH FLOWS FROM INVESTING ACTIVITIES: Capital Expenditures, net of $179, $165 and $217 of non-cash capital expenditures in fiscal 2016, 2015 and 2014, respectively (1,621) (1,503) (1,442) Proceeds from Sales of Investments 144 323 Payments for Businesses Acquired, net (1,666) (200) Proceeds from Sales of Property and Equipment S 13 18 Net Cash Used in Investing Activities (2.982) (1,271) (1,583) CASH FLOWS FROM FINANCING ACTIVITIES: * Proceeds from Short-Term Borrowings, net Proceeds from Long-Term Borrowings, net of discounts Repayments of Long-Term Debt 360 60 290 4,959 3,991 1,981 (3,045) (39) (39) Repurchases of Common Stock 6,880) (7,000) (7,000) Proceeds from Sales of Common Stock 218 228 252 Cash Dividends Paid to Stockholders (3,404) (3,031) (2,530) (25) Other Financing Activities (78 Net Cash Used in Financing Activities (7,870) (7,071) (5,787) Change in Cash and Cash Equivalents 330 604 (100) (8) Effect of Exchange Rate Changes on Cash and Cash Equivalents (111 (106) Cash and Cash Equivalents at Beginning of Year 1.723 2,216 1,929 $2.538 S2.216 $1,723 Cash and Cash Equivalents at End of Year SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS MADE FOR: s 874 $ 924 S 782 Interest, net of interest capitalized Income Taxes $4.623 $3.853 $3.435 (I) Fiscal years ended January 29, 2017, January 31, 2016, and February 1, 2015 include 52 weeks. Consolidated Balance Sheets January 29, 2017 January 31, 2016 amounts in millions, except share and per share data "Fiscal 2016" "Fiscal 2015" ASSETS Current Assets: $ 2.538 S 2,216 Cash and Cash Equivalents Receivables, net 2,029 1.890 Merchandise Inventories 12,549 11.809 608 Other Current Assets 569 Total Current Assets 17,724 16,484 Property and Equipment, at cost. 40.426 39.266 Net Property and on and Amortization quipment Le 18,512 21.914 17.075 23 191 2.093 Goodwill 2.102 Other Assets 1.235 1.196 Total Assets $42,966 $41,973 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Short-Term Debt 710 350 6,565 Accounts Payable Accrued Salaries and Related Expenses 7,000 1,484 1,515 Sales Taxes Payable 508 476 Deferred Revenue 1,669 1,566 Income Taxes Payable Current Installments of Long-Term Debt Other Accrued Expenses 25 34 542 77 2,195 1,941 Total Current Liabilities 14,133 12,524 Long-Term Debt, excluding current installments 22,349 20.789 Other Long-Term Liabilities 1,855 1,965 Deferred Income Taxes 296 379 Total Liabilities 38.633 35.657 STOCKHOLDERS' EQUITY Common Stock, par value $0.05; authorized: 10 billion shares; issued: 88 1.776 billion shares January 29, 2017 and 1.772 billion shares at January 31, 2016; outstanding: 1.203 billion shares at January 29, 2017 and 1.252 billion shares at January 31, 2016 Paid-in Capital 9,787 9,347 Retained Earnings 35.519 30,973 Accumulated Other Comprehensive Loss (867) (898) Treasury Stock, at cost, 573 million shares shares at January 31, 2016 Total Stockholders' Equity January 29, 2017 and 520 million (40.194) (33,194) 4,333 6,316 $42,966 Total Liabilities and Stockholders' Equity $41,973 Jan. 29, 2017 Feb. 1, 2015 "Fiscal 2014' Jan. 31, 2016 amounts in millions "Fiscal 2016" "Fiscal 2015" CASH FLOWS FROM OPERATING ACTIVITIES: Net Earnings $7,957 $7,009 $6,345 Reconciliation of Net Earnings to Net Cash Provided by Operating Activities: Depreciation and Amortization 1,973 1,863 1,786 Stock-Based Compensation Expense 267 244 225 (323) Gain on Sales of Investments (144) f the effects of acquisitions Changes in Assets and Liabilities, net Receivables, net (138) (181) (81) Merchandise Inventories (769) (546) (124) (48) Other Current Assets (5) (199) Accounts Payable and Accrued Expenses 446 888 244 Deferred Revenue 99 109 146 Income Taxes Payable 109 154 168 Deferred Income Taxes (117) 15 159 Other 4 (33) (104) Net Cash Provided by Operating Activities 9,783 9.373 8.242 CASH FLOWS FROM INVESTING ACTIVITIES: Capital Expenditures, net of $179, $165 and $217 of non-cash capital expenditures in fiscal 2016, 2015 and 2014, respectively (1,621) (1,503) (1,442) Proceeds from Sales of Investments 144 323 Payments for Businesses Acquired, net (1,666) (200) Proceeds from Sales of Property and Equipment S 13 18 Net Cash Used in Investing Activities (2.982) (1,271) (1,583) CASH FLOWS FROM FINANCING ACTIVITIES: * Proceeds from Short-Term Borrowings, net Proceeds from Long-Term Borrowings, net of discounts Repayments of Long-Term Debt 360 60 290 4,959 3,991 1,981 (3,045) (39) (39) Repurchases of Common Stock 6,880) (7,000) (7,000) Proceeds from Sales of Common Stock 218 228 252 Cash Dividends Paid to Stockholders (3,404) (3,031) (2,530) (25) Other Financing Activities (78 Net Cash Used in Financing Activities (7,870) (7,071) (5,787) Change in Cash and Cash Equivalents 330 604 (100) (8) Effect of Exchange Rate Changes on Cash and Cash Equivalents (111 (106) Cash and Cash Equivalents at Beginning of Year 1.723 2,216 1,929 $2.538 S2.216 $1,723 Cash and Cash Equivalents at End of Year SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS MADE FOR: s 874 $ 924 S 782 Interest, net of interest capitalized Income Taxes $4.623 $3.853 $3.435 (I) Fiscal years ended January 29, 2017, January 31, 2016, and February 1, 2015 include 52 weeks. Consolidated Balance Sheets January 29, 2017 January 31, 2016 amounts in millions, except share and per share data "Fiscal 2016" "Fiscal 2015" ASSETS Current Assets: $ 2.538 S 2,216 Cash and Cash Equivalents Receivables, net 2,029 1.890 Merchandise Inventories 12,549 11.809 608 Other Current Assets 569 Total Current Assets 17,724 16,484 Property and Equipment, at cost. 40.426 39.266 Net Property and on and Amortization quipment Le 18,512 21.914 17.075 23 191 2.093 Goodwill 2.102 Other Assets 1.235 1.196 Total Assets $42,966 $41,973 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Short-Term Debt 710 350 6,565 Accounts Payable Accrued Salaries and Related Expenses 7,000 1,484 1,515 Sales Taxes Payable 508 476 Deferred Revenue 1,669 1,566 Income Taxes Payable Current Installments of Long-Term Debt Other Accrued Expenses 25 34 542 77 2,195 1,941 Total Current Liabilities 14,133 12,524 Long-Term Debt, excluding current installments 22,349 20.789 Other Long-Term Liabilities 1,855 1,965 Deferred Income Taxes 296 379 Total Liabilities 38.633 35.657 STOCKHOLDERS' EQUITY Common Stock, par value $0.05; authorized: 10 billion shares; issued: 88 1.776 billion shares January 29, 2017 and 1.772 billion shares at January 31, 2016; outstanding: 1.203 billion shares at January 29, 2017 and 1.252 billion shares at January 31, 2016 Paid-in Capital 9,787 9,347 Retained Earnings 35.519 30,973 Accumulated Other Comprehensive Loss (867) (898) Treasury Stock, at cost, 573 million shares shares at January 31, 2016 Total Stockholders' Equity January 29, 2017 and 520 million (40.194) (33,194) 4,333 6,316 $42,966 Total Liabilities and Stockholders' Equity $41,973