(Analyzing coverage ratios) The income statements for Lowe's Companies, Inc. (LOW), spanning the period 2014-2016 (just before the housing crash, so these are representative years) are found here: a....


(Analyzing coverage ratios) The income statements for Lowe's Companies, Inc. (LOW), spanning the period 2014-2016 (just before the housing crash, so these are representative years) are found here:<br>a. Calculate the times interest earned ratio for each of the years for which you have data.<br>b. What is your assessment of how the firm's ability to service its debt obligations has changed over this period?<br>Data Table<br>a. The times interest earned ratio for 2016 was<br>times. (Round to two decimal places.)<br>2016<br>2015<br>2014<br>The times interest earned ratio for 2015 was<br>times. (Round to two decimal places.)<br>$4,971,000<br>$4,792,000<br>$4,149,000<br>Net operating income (EBIT)<br>Interest expense<br>(516,000)<br>(476,000)<br>(552,000)<br>The times interest earned ratio for 2014 was<br>times. (Round to two decimal places.)<br>$4,419,000<br>$4,276,000<br>$3,673,000<br>Earnings before taxes<br>b. What is your assessment of how the firm's ability to service its debt obligations has changed over this period?<br>(1,870,000)<br>(1,580,000)<br>(1,390,000)<br>Income taxes<br>$2,549,000<br>$2,696,000<br>$2,283,000<br>Net income<br>O A. Lowe's ability to service its debt obligations has been declining every single year.<br>O B. Lowe's ability to service its debt obligations has been increasing lately.<br>Print<br>Done<br>O C. Lowe's ability to service its debt obligations has been steady over the years.<br>O D. Lowe's ability to service its debt obligations has been declining lately.<br>

Extracted text: (Analyzing coverage ratios) The income statements for Lowe's Companies, Inc. (LOW), 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? Data Table a. The times interest earned ratio for 2016 was times. (Round to two decimal places.) 2016 2015 2014 The times interest earned ratio for 2015 was times. (Round to two decimal places.) $4,971,000 $4,792,000 $4,149,000 Net operating income (EBIT) Interest expense (516,000) (476,000) (552,000) The times interest earned ratio for 2014 was times. (Round to two decimal places.) $4,419,000 $4,276,000 $3,673,000 Earnings before taxes b. What is your assessment of how the firm's ability to service its debt obligations has changed over this period? (1,870,000) (1,580,000) (1,390,000) Income taxes $2,549,000 $2,696,000 $2,283,000 Net income O A. Lowe's ability to service its debt obligations has been declining every single year. O B. Lowe's ability to service its debt obligations has been increasing lately. Print Done O C. Lowe's ability to service its debt obligations has been steady over the years. O D. Lowe's ability to service its debt obligations has been declining lately.

Jun 05, 2022
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