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

1. Compute the ratio of liabilities to total assets for Years 1 and 2. Round to one decimal place.
2. Given your answer to part (1), what is the ratio of stockholders€™ equity to total assets? Round to one decimal place.
3. Compute the ratio of liabilities to stockholders€™ equity. Round to one decimal place.
4. Are Home Depot€™s operations financed primarily with liabilities or equity?
5. Comparing Years 1 and 2, should creditors feel more or less safe in Year 2?
6. With a market price of $66.60, compute the price-earnings ratio for Year 2.
7. With a market price of $44.20, compute the price-earnings ratio for Year 1.
8. Compare the results from parts (6) and (7). Comment on any differences.

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Year 2 Year 1 Total assets Total liabilities Total stockholders' equity Earnings per share $40,518 22,620 17,898 2.49 $40,125 21,236 18,889 2.03