Amazon.com, Inc. (AMZN) is one of the largest internet retailers in the world. Wal-Mart Stores, Inc. (WMT) is the largest retailer in the United States. Amazon and Wal-Mart compete in similar markets; however, Wal-Mart sells through both traditional retail stores and the internet, while Amazon sells only through the internet. Interest expense and income before income tax expense from the financial statements of both companies for two recent years follow (in millions):

		Amazon				Walmart
		Year 2		Year 1		Year 2		Year 1
Interest expense		$484		$459		$2,548		$2,461
Income (loss) before income tax expense		3,892		1,568		21,638		24,799

a. Compute the times interest earned ratio for both companies for the two years. Round your answers to one decimal place.

		Amazon				Walmart
		Year 2		Year 1		Year 2		Year 1
Times Interest Earned Ratio

b. Based on your calculations for Amazon above, which of these statements is correct?

c. Does a times interest earned ratio less than 1.0 mean that creditors will not get paid interest?

d. Interpret Walmarts interest coverage from Year 1 to Year 2.

e. Which company appears to have the greater protection for creditors?