Home Depot Inc (HD)
Interest coverage
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Jan 28, 2024 | Oct 31, 2023 | Oct 29, 2023 | Jul 31, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 31, 2023 | Jan 29, 2023 | Oct 31, 2022 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Apr 30, 2022 | Jan 31, 2022 | Jan 30, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 21,586,000 | 21,204,000 | 19,954,000 | 18,875,000 | 19,251,000 | 21,738,000 | 24,170,000 | 24,299,000 | 23,639,000 | 21,804,000 | 21,329,000 | 21,900,000 | 24,317,000 | 25,454,000 | 25,231,000 | 23,919,000 | 21,550,000 | 21,428,000 | 22,140,000 | 23,941,000 |
| Interest expense (ttm) | US$ in thousands | 2,321,000 | 2,196,000 | 2,084,000 | 1,998,000 | 2,000,000 | 1,956,000 | 1,912,000 | 1,899,000 | 1,863,000 | 1,845,000 | 1,789,000 | 1,728,000 | 1,658,000 | 1,579,000 | 1,538,000 | 1,466,000 | 1,426,000 | 1,395,000 | 1,349,000 | 1,334,000 |
| Interest coverage | 9.30 | 9.66 | 9.57 | 9.45 | 9.63 | 11.11 | 12.64 | 12.80 | 12.69 | 11.82 | 11.92 | 12.67 | 14.67 | 16.12 | 16.41 | 16.32 | 15.11 | 15.36 | 16.41 | 17.95 |
January 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $21,586,000K ÷ $2,321,000K
= 9.30
Interest coverage ratio is a financial metric that indicates a company's ability to meet its interest obligations on outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by interest expenses.
Analyzing the interest coverage ratios of Home Depot Inc based on the provided data, we observe the following trends:
- The interest coverage ratio has generally been healthy, ranging from 9.30 to 17.95 over the period from January 30, 2022, to January 31, 2025.
- The ratio peaked at 17.95 on January 30, 2022, indicating that the company's earnings were nearly 18 times higher than its interest expenses, indicating strong financial health.
- Subsequently, the interest coverage ratio exhibited a decreasing trend over the following years, indicating a slight decline in the company's ability to cover its interest payments from earnings.
- By January 31, 2025, the interest coverage ratio had decreased to 9.30, suggesting a relatively lower ability to cover interest expenses compared to the earlier periods.
In conclusion, although Home Depot Inc has maintained a generally solid interest coverage ratio over the analyzed period, the decreasing trend over time might indicate a need to closely monitor the company's ability to generate sufficient earnings to cover interest expenses in the future.
Peer comparison
Jan 31, 2025