The Home Depot, Inc. (HD) operates over 2,200 home improvement retail stores and is a competitor of Lowe's (LOW). The following data (in millions) were adapted from recent financial statements of The Home Depot.

		Year 2		Year 1
Total assets		$39,946		$40,518
Total liabilities		30,624		27,996
Total stockholders equity		9,322		12,522
Earnings per share		$4.74		$3.78

1. Compute the debt ratio for Years 1 and 2. Round to one decimal place.

	Year 2	Year 1
Debt ratio	%	%

2. Given your answer to part (1), what is the ratio of stockholders' equity to total assets? Round to one decimal place.

	Year 2	Year 1
Ratio of stockholders' equity to total assets	%	%

3. Compute the ratio of liabilities to stockholders' equity. Round to one decimal place.

	Year 2	Year 1
Ratio of liabilities to stockholders' equity	%	%

5. Comparing Years 1 and 2, should creditors feel more or less safe in Year 2?

6. With a market price of $104.43, compute the price-earnings ratio for Year 2. Round to one decimal place.

7. With a market price of $75.09, compute the price-earnings ratio for Year 1. Round to one decimal place.