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Calculate the times interest earned ratio for each of the years for which you have data. b. What is your assessment of how the​ firm's ability to service its debt obligations has changed over this​ period?

Calculate the times interest earned ratio for each of the years for which you have data. b. What is your assessment of how the​ firm's ability to service its debt obligations has changed over this​ period?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Module 6 Question 5: Part 1

 
a. Calculate the times interest earned ratio for each of the years for which you have data.
b. What is your assessment of how the​ firm's ability to service its debt obligations has changed over this​ period?
 
 
 
 
 
(Related to Checkpoint 15.1) (Analyzing coverage ratios) The income statements for Home Depot, Inc. (HD), spanning the period 2014-2016 (just before the housing crash, so these are representative years) are found here: a. Calculate the times interest earned ratio for each of the years for which you have data. b. What is your assessment of how the firm's ability to service its debt obligations has changed over this period? a. The times interest earned ratio for 2016 was times. (Round to two decimal places.)
Transcribed Image Text:(Related to Checkpoint 15.1) (Analyzing coverage ratios) The income statements for Home Depot, Inc. (HD), spanning the period 2014-2016 (just before the housing crash, so these are representative years) are found here: a. Calculate the times interest earned ratio for each of the years for which you have data. b. What is your assessment of how the firm's ability to service its debt obligations has changed over this period? a. The times interest earned ratio for 2016 was times. (Round to two decimal places.)
Data table $ thousands Net operating income (EBIT) Interest expense Earnings before taxes Income taxes 2016 $11,774,000 (919,000) $10,855,000 (4,012,000) $6,843,000 Net income (Click on the icon in order to copy its contents into a spreadsheet.) 2015 $10,469,000 (830,000) $9,639,000 (3,631,000) $6,008,000 2014 $9,166,000 (711,000) $8,455,000 (3,082,000) $5,373,000
Transcribed Image Text:Data table $ thousands Net operating income (EBIT) Interest expense Earnings before taxes Income taxes 2016 $11,774,000 (919,000) $10,855,000 (4,012,000) $6,843,000 Net income (Click on the icon in order to copy its contents into a spreadsheet.) 2015 $10,469,000 (830,000) $9,639,000 (3,631,000) $6,008,000 2014 $9,166,000 (711,000) $8,455,000 (3,082,000) $5,373,000
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