Ratio of Liabilities to Stockholders' Equity
The Craft Bin, a major competitor of The Building Store in thehome improvement business, operates over 1,600 stores. Craft Binrecently reported the following balance sheet data (inmillions):
| Year 2 | Year 1 |
| Total assets | $30,192 | | $25,245 | |
| Total liabilities | 15,392 | | 11,745 | |
a. Determine the total stockholders' equity atthe end of Years 2 and 1.
| Year 2 | $ 14,800 million |
| Year 1 | $13,500 million |
b. Determine the ratio of liabilities tostockholders' equity for Year 2 and Year 1. Round your answers totwo decimal places.
c. Based on (b), which is true regarding therisk to the creditors?
_________________ (increased, decreased, or nochange)
d. The Building Store, Inc., is the world'slargest home improvement retailer and one of the largest retailersin the United States based on net sales volume. The Building Storeoperates over 2,200 Building stores that sell a wide assortment ofbuilding materials and home improvement and lawn and gardenproducts.
The Building Store reported the following balance sheet data (inmillions)
| Year 2 | Year 1 |
| Total assets | $26,688 | | $22,932 | |
| Total stockholders' equity | 13,900 | | 12,600 | |
For Year 2, the creditors of which company are more atrisk?
The Craft Bin
