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Home Depot: Ratio of liabilities to stockholders' equity The Home Depot, Inc., is the world's largest home improvement retailer and one of the largest retailers

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Home Depot: Ratio of liabilities to stockholders' equity The Home Depot, Inc., 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 milions) Year 3 Year 2 Year 1 $40,518 $41,804 $40,518 Total stockholders' equity 12,522 17,777 17,898 al assets a. Determine the total liabilities at the end of Years 1, 2, and 3. Total liabilities Year 1 Year 2 Year 3 b. Compute the ratio of liabilities to stockholders' equity for all three years. (Round to two decimal places.) Liabilities to stockholders' equity Year 1 Year 2 Year 3 c. Which of the following statements is true? 1. A high ratio of protection to creditors is favorable to the creditors. 2. A low ratio of protection to creditors is favorable to the creditors 3. A high ratio of protection to creditors is favorable to the stockholders 4. A low ratio of protection to creditors is favorable to the stockholders

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