To answer the following questions use the financial statements for Home Depot, Inc., in Appendix A at the end of the textbook:

a. Compute the company’s current ratio and quick ratio for the most recent year reported. Do these ratios provide support that Home Depot is able to repay its current liabilities as they come due? Explain.

b. Compute the company’s debt ratio. Does Home Depot appear to have excessive debt?

Explain.

c. Examine the company’s statement of cash flows. Does Home Depot’s cash flow from operating activities appear adequate to cover its current liabilities as they come due? Explain.