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Answer :
The debt-to-assets ratio for the company for the years ended January 29, 2017, and January 31, 2016, respectively, was 89.9 and 85.0 percent.
The debt-to-assets ratio is a financial ratio that indicates the percentage of a company's assets that are financed by debt. To calculate this ratio, we divide the total debt of the company by its total assets. The resulting percentage represents the proportion of the company's assets that are funded by debt.
Using the amounts reported in the financial statements for the years ended January 29, 2017, and January 31, 2016, respectively, we can calculate the debt-to-assets ratio for the company. The ratios for each year are as follows:
- 2017: 89.9 percent
- 2016: 85.0 percent
This means that in 2017, almost 90 percent of the company's assets were financed by debt, while in 2016, the figure was slightly lower at 85 percent.
It's worth noting that a high debt-to-assets ratio can indicate that a company is heavily reliant on debt financing, which may be a cause for concern. However, this is not necessarily a bad thing, as long as the company is able to manage its debt effectively and generate sufficient cash flow to service its debt obligations.
In conclusion, the debt-to-assets ratio is an essential indicator to assess a company's financial stability. Lower percentages are generally preferable, as they imply less reliance on debt to finance the company's assets.
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