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Calculate the times interest earned ratio

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Reference no: EM131583331

(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:

$ thousands 2016 2015 2014

Net operating income (EBIT)   $11,774,000   $10,469,000   $9,166,000

Interest expense $(919,000) $(830,000) $(711,000)

Earnings before taxes $10,855,000 $9,639,000 $8,455,000

Income taxes $(4,012,000) $(3,631,000) $(3,082,000)

Net income $6,843,000 $6,008,000   $5,373,000

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?

Reference no: EM131583331

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