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Analysis of Debt
Difficulty: Advanced
Total Debt (Carrying Amount)
Lowe’s Cos. Inc., Statement of Financial Position, Debt
USD $ in millions
Based on: 10-K (filing date: 2018-04-02), 10-K (filing date: 2017-04-04), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-03-31), 10-K (filing date: 2013-04-02).
| Item | Description | The company |
|---|---|---|
| Total debt, including capitalized lease obligations (carrying amount) | Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations. | Lowe’s Cos. Inc.’s total debt increased from 2016 to 2017 and from 2017 to 2018. |
Total Debt (Fair Value)
| Feb 2, 2018 | |
|---|---|
| Selected Financial Data (USD $ in millions) | |
| Short-term borrowings | |
| Long-term debt, excluding capitalized lease obligations | |
| Capitalized lease obligations | |
| Total debt, including capitalized lease obligations (fair value) | |
| Ratio | |
| Debt, fair value to carrying amount | |
Based on: 10-K (filing date: 2018-04-02).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on debt:
| Interest Rate | Debt Amount1 | Interest Rate × Debt Amount | Weighted-average Interest Rate2 | |
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Based on: 10-K (filing date: 2018-04-02).
1 USD $ in millions
2 Weighted-average interest rate = 100 × ÷ =
Interest Costs Incurred
Lowe’s Cos. Inc.
USD $ in millions
| 12 months ended | Feb 2, 2018 | Feb 3, 2017 | Jan 29, 2016 | Jan 30, 2015 | Jan 31, 2014 | Feb 1, 2013 | |||||||
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| Interest expense | |
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| Interest capitalized | |
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| Interest costs incurred | |
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Based on: 10-K (filing date: 2018-04-02), 10-K (filing date: 2017-04-04), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-03-31), 10-K (filing date: 2013-04-02).
| Item | Description | The company |
|---|---|---|
| Interest expense | Amount of the cost of borrowed funds accounted for as interest expense for debt. | Lowe’s Cos. Inc.’s interest expense increased from 2016 to 2017 but then slightly declined from 2017 to 2018. |
| Interest capitalized | Amount of interest costs capitalized disclosed as an adjusting item to interest costs incurred. | Lowe’s Cos. Inc.’s interest capitalized increased from 2016 to 2017 and from 2017 to 2018. |
| Interest costs incurred | Total interest costs incurred during the period and either capitalized or charged against earnings. | Lowe’s Cos. Inc.’s interest costs incurred increased from 2016 to 2017 but then slightly declined from 2017 to 2018. |
Adjusted Interest Coverage Ratio
Based on: 10-K (filing date: 2018-04-02), 10-K (filing date: 2017-04-04), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-03-31), 10-K (filing date: 2013-04-02).
2018 Calculations
1 Interest coverage ratio (excluding capitalized interest) = EBIT ÷ Interest expense, net of amount capitalized
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2 Adjusted interest coverage ratio (including capitalized interest) = EBIT ÷ Interest costs incurred
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| Ratio | Description | The company |
|---|---|---|
| Adjusted interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest). | Lowe’s Cos. Inc.’s adjusted interest coverage ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
