27.03.2023 - 20:40

The Builder’s Outlet is the world’s largest home improvement retailer and one of the largest retailers in the United States based on net sales volume. The Builder’s Outlet operates over 2,200 Builder’s Outlet stores that sell a wide assortment of building

The Builder’s Outlet is the world’s largest home improvement retailer and one of the largest retailers in the United States based on net sales volume. The Builder’s Outlet operates over 2,200 Builder’s Outlet stores that sell a wide assortment of building materials and home improvement and lawn and garden products.

Builder’s Outlet recently reported the following balance sheet data (in millions):

Year 2 Year 1
Total assets $67,792 $86,640
Total stockholders’ equity 33,400 36,100

a. Determine the total liabilities at the end of Years 2 and 1, in millions.

b. Determine the ratio of liabilities to stockholders’ equity for Year 2 and Year 1. Round your answers to two decimal places.

c. The ratio of liabilities to stockholders’ equity _____ (decreased/increased/stayed the same), indicating _____ in risk for creditors from Year 1 to Year 2.

Answers (1)
  • djkamanaft
    April 1, 2023 в 22:19

    a. The total liabilities at the end of Year 2 is $34,392 million ($67,792 million - $33,400 million). The total liabilities at the end of Year 1 is $50,540 million ($86,640 million - $36,100 million).

    b. The ratio of liabilities to stockholders' equity for Year 2 is 1.03 ($34,392 million / $33,400 million) and for Year 1 is 1.40 ($50,540 million / $36,100 million).

    c. The ratio of liabilities to stockholders' equity decreased from Year 1 to Year 2, indicating a decrease in risk for creditors. A lower ratio indicates that the company has more equity in relation to its liabilities, which means that it is less leveraged and therefore less risky for creditors.

Do you know the answer?
Not sure about the answer?
Find the right answer to the question The Builder’s Outlet is the world’s largest home improvement retailer and one of the largest retailers in the United States based on net sales volume. The Builder’s Outlet operates over 2,200 Builder’s Outlet stores that sell a wide assortment of building by subject Accounting, and if there is no answer or no one has given the right answer, then use the search and try to find the answer among similar questions.
Search for other answers
New questions in the category: Accounting
Authorization
*
*

Password generation