Home Depot Inc (HD)
Interest coverage
| Jan 28, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Aug 1, 2021 | May 2, 2021 | Jan 31, 2021 | Nov 1, 2020 | Aug 2, 2020 | May 3, 2020 | Feb 2, 2020 | Nov 3, 2019 | Aug 4, 2019 | May 5, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 21,867,000 | 22,464,000 | 23,164,000 | 23,746,000 | 24,094,000 | 24,142,000 | 23,797,000 | 23,229,000 | 23,084,000 | 22,334,000 | 21,387,000 | 20,819,000 | 18,325,000 | 17,652,000 | 16,758,000 | 15,597,000 | 15,916,000 | 15,878,000 | 15,804,000 | 15,816,000 |
| Interest expense (ttm) | US$ in thousands | 1,943,000 | 1,881,000 | 1,807,000 | 1,719,000 | 1,617,000 | 1,507,000 | 1,435,000 | 1,380,000 | 1,347,000 | 1,343,000 | 1,342,000 | 1,362,000 | 1,347,000 | 1,319,000 | 1,281,000 | 1,237,000 | 1,201,000 | 1,161,000 | 1,108,000 | 1,078,000 |
| Interest coverage | 11.25 | 11.94 | 12.82 | 13.81 | 14.90 | 16.02 | 16.58 | 16.83 | 17.14 | 16.63 | 15.94 | 15.29 | 13.60 | 13.38 | 13.08 | 12.61 | 13.25 | 13.68 | 14.26 | 14.67 |
January 28, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $21,867,000K ÷ $1,943,000K
= 11.25
The interest coverage ratio of Home Depot Inc has exhibited a generally positive trend over the last few quarters, consistently ranging between 11.25 and 17.14. This ratio indicates the company's ability to meet its interest payments on outstanding debt obligations from its earnings before interest and taxes (EBIT).
A higher interest coverage ratio is typically viewed favorably, as it suggests that the company has sufficient earnings to cover its interest expenses comfortably. Home Depot's interest coverage ratios above 10 demonstrate a strong ability to service its interest payments.
The consistent improvement in the interest coverage ratio over the periods indicates the company's improving capacity to meet its interest obligations. It suggests that Home Depot's earnings are growing at a faster pace compared to its interest expenses, which is a positive sign for investors and creditors.
Overall, based on the trend of increasing interest coverage ratios, Home Depot Inc appears to have a healthy financial position in terms of its ability to cover its interest payments, which is important for long-term sustainability and growth.
Peer comparison
Jan 28, 2024