Question

THE HOME DEPOT, INC. CONSOLIDATED BALANCE SHEETS February 3, 2019 January 28, 2018 in millions, except per share data Assets Current assets: Cash and cash equivalents Receivables, net Merchandise inventories Other current assets Total current assets Net property and equipment Goodwill Other assets Total assets 1,778 $ 1,936 13,925 890 18,529 22,375 2,252 847 44,003 $ 3,595 1,952 12,748 638 18,933 22,075 2,275 1,246 44,529 $ Liabilities and Stockholders' Equity Current liabilities: Short-term debt Accounts payable Accrued salaries and related expenses Sales taxes payable Deferred revenue Income taxes payable Current installments of long-term debt Other accrued expenses Total current liabilities Long-term debt, excluding current installments Deferred income taxes Other long-term liabilities Total liabilities 1,339 $ 7,755 1,506 656 1,782 11 1,056 2,611 16,716 26,807 491 1,867 1,559 7,244 1,640 520 1,805 54 1,202 2,170 16,194 24,267 440 2,174 43,075 45,881 89 89 Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,782 at February 3, 2019 and 1,780 shares at January 28, 2018; outstanding: 1.105 shares at February 3, 2019 and 1,158 shares at January 28, 2018 Paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost, 677 shares at February 3, 2019 and 622 shares at January 28, 2018 Total stockholders' (deficit) equity Total liabilities and stockholders' equity 10,578 46,423 (772) 10,192 39,935 (566) (58,196) (1,878) 44,003 $ (48,196) 1,454 44,529
1. What is the Long-Term Liabilities to Current Liabilities?

2. What is the Asset Turnover?

3. What are the Return on Assets?

4. Even though net earnings increased, net equity decreased because:

a. Inventories shrank.

b. The company made major purchases of its corporate stock.

c. The company paid down its long-term debt.

d. income tax increased

Answer 1

		Particulars		2019	2018
	1)	Long term liabilities to Current Liabilities		=(26807+1867)/16716	=(24267+2174)/16194
		= Long term Liab + Other Long term Liab/Current Liab		1.72	1.63
	2)	Asset Turnover		=108203/44003	=100904/44529
		= Turnover / Total Assets		2.46	2.27
	3)	Return on assets		=11121/44003	=8630/44529
		= Net earnings / Total Assets		25.27%	19.38%
		Note: Total Assets can also by Average of Total Assets of two year.
	4)	Answer is b) The company made major purchases of its corporate stock. This can be seen from increase in Treasury stock.