The Home Depot reported the following data (in millions) in its financial statements for 2005 and 2004:
|
|
2005 |
2004 |
|
Net sales |
$73,094 |
$64,816 |
|
Total assets at the end of the year |
38,907 |
34,437 |
|
Total assets at the beginning of the year |
34,437 |
30,011 |
a. Determine the ratio of net sales to average total assets for The Home Depot for 2005 and 2004. Round to two decimal places.
b. What conclusions can be drawn from these ratios concerning the trend in the ability of The Home Depot to effectively use its assets to generate sales?