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Please help me solve A . the times interest earned ratio Analyze and compare Amazon.com and Walmart Amazon.com, Inc. (AMZN) is one of the largest
Please help me solve A the times interest earned ratio
Analyze and compare Amazon.com and Walmart Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Walmart Inc. (WMT) is the largest retailer in the United States. Amazon and Walmart compete in similar markets; however, Walmart 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): Interest expense Income (loss) before income tax expense Amazon Year 2 $1,809 38,151 Amazon Year 1 $1,647 24,178 Walmart Year 2 $1,674 18,696 Walmart Year 1 $1,976 20,564 a. Compute the times interest earned ratio for both companies for the two years. Round your answers to one decimal place. Times Interest Earned Ratio Amazon Year 2 x 7.5 Amazon Year 1 x 14.7 Walmart Year 2 x 11.2 Walmart Year 1 x 10.4 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 Walmart's interest coverage from Year 1 to Year 2. e. Which company appears to have the greater protection for creditors?
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