Calculate the debt ratio, at January 28, 2018 ( Fiscal 2017 ) and January 29, 20

Question

Calculate the debt ratio, at January 28, 2018 (Fiscal 2017) and January 29, 2017 (Fiscal 2016).

Calculate the debt/equity ratio at January 28, 2018 (Fiscal 2017) and January 29, 2017 (Fiscal 2016).

THE HOME DEPOT, INC. CONSOLIDATED STATEMENTS OF EARNINGS Filscal Fiscal Fscal in millions, except per share data Net sales Cost of sales 100,904 $ 94,595 S 88,519 66,548 62,282 58,254 34,356 32,313 30,265 Gross profit Operating expenses 17,864 17,132 16,801 1,690 19,675 18,886 18,491 14,681 13,427 11774 Selling, general and administrative Depreciation and amortization 1,811 1,754 Total operating expenses Operating income Interest and other (income) expense: (74) 1,057 983 (36) (166) 972 936 Interest and investment income 919 753 13,698 49 11,021 4,012 $ 8,630 S 7,957 7,009 Interest expense nterest and other, net Earnings before provision for income taxes Provision for income taxes 5,068 4,534 Net eanings Basic weighted average common shares Basic eamings per share 1.178 1,229 1,277 $7.33 647 $ 5.49 1,184 Diluted weighted average common shares Diluted eamings per share See accompanying notes to consolidated financial statements. 1,234 $ 7.29 S 645 5.46 1,283

Explanation / Answer

Part A

Operating income ratio = operating income / net sales

2017 = 14681/100904 = 14.5%

2016= 13427/94595 = 14.2%

2015 = 11774/88519 = 13.3%

Part B

Debt ratio = total debt (liabilities) / total assets

January 28, 2018 = 43075/44529 = 0.97 or 96.7%

January 29, 2017 = 38633/42966 = 0.90 or 89.9%

Part C

debt/equity ratio = total liabilities / total stockholders' equity

January 28, 2018 = 43075 / 1454 = 29.63

January 29, 2017 = 38633 /4333 = 8.92

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