Home Depot Inc (HD)
Interest coverage
| Jan 31, 2025 | Jan 31, 2024 | Jan 28, 2024 | Jan 31, 2023 | Jan 29, 2023 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 21,727,000 | 21,689,000 | 21,867,000 | 24,094,000 | 24,094,000 |
| Interest expense | US$ in thousands | 2,321,000 | 1,943,000 | 1,943,000 | 1,617,000 | 1,617,000 |
| Interest coverage | 9.36 | 11.16 | 11.25 | 14.90 | 14.90 |
January 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $21,727,000K ÷ $2,321,000K
= 9.36
Home Depot Inc's interest coverage ratio, which measures its ability to cover interest expenses with operating income, has shown a declining trend over the past few years. The ratio decreased from 14.90 on January 29, 2023, to 9.36 on January 31, 2025. This suggests that the company may be facing challenges in generating sufficient operating income to cover its interest expenses. A lower interest coverage ratio indicates a higher risk for lenders and investors, as it may signify potential difficulties in meeting debt obligations. Home Depot Inc should closely monitor this trend and take necessary actions to improve its interest coverage ratio for financial stability and sustainability in the long term.
Peer comparison
Jan 31, 2025