Partial Classified Balance Sheet for Walgreens

The following items, listed alphabetically, appear on Walgreens Boots Alliance, Inc consolidated balance sheet at August 31, 2015 (in millions):

Accrued expenses and other liabilities	$5,225
Deferred income taxes (long-term)	3,538
Long-term debt	13,315
Other non-current liabilities	4,072
Short-term borrowings	1,068
Trade accounts payable	10,088
Income taxes	176

Source: Walgreens, 2015 Form 10-K.

Required:

1. Prepare the Current Liabilities and Long-Term Liabilities sections of Walgreens's classified balance sheet at August 31, 2015. Enter your answers in millions.

Walgreens
Balance Sheet (Partial)
August 31, 2015
Current Liabilities
	$
Total current liabilities	$
Long-Term Liabilities
	$
Total long-term liabilities	$

2. Walgreens had total liabilities of $16,633 and total shareholders equity of $20,561 at August 31, 2014. Total shareholders equity at August 31, 2015, amounted to $31,300. (All amounts are in millions.) Compute Walgreens debt-to-equity ratio at August 31, 2015 and 2014. Round your answers to two decimal places.

Computation of debt-to-equity ratios:
2014:
2015:

As an investor, how would you react to the changes in the debt-to-equity ratio?

If the ratio is constant and less than 1, it indicates the company is safe to invest or remain invested.

If the ratio has increased over 2 periods and is more than 1, it indicates the company is safe to invest and remain invested.

If the ratio has decreased over 2 periods and is less than one, it indicates the company is not a safe investment and you would look for better options to invest.

This ratio is not at all significant from the investor's point of view, you would ignore this ratio.

3. What other related ratios would the companys lenders use to assess the company? What do these ratios measure?

The lenders would be interested in Walgreens and . Both ratios measure the degree to which a company can make its out of current cash flows.