Abbreviated income statements for Lowes Companies, Inc. (LOW) spanning the period 20062008 (just before the housing crash,

Abbreviated income statements for Lowe’s Companies, Inc. (LOW) spanning the period 2006–2008 (just before the housing crash, so these are representative years) are as follows:

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?
c. How does Lowe’s compare to Home Depot (HD) in Study Problem? Is it better able to service its debt than Home Depot? Why or whynot?

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2008 2007 2006 Earnings before interest and taxes Interest expense Income before tax Income tax expense Net income $4,750,000 S5,152,000 4,654,000 (239,000) 154 S4,511,000 $4,998,000 02,000496,000 (1,702,000) 1893,000) (1731,000) $2,809,000 $3,105,000 $2,765,000