Clearwater Paper Corporation (CLW)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.28 | 0.33 | 0.38 | 0.40 | 0.47 |
| Debt-to-capital ratio | 0.41 | 0.50 | 0.55 | 0.58 | 0.67 |
| Debt-to-equity ratio | 0.69 | 0.99 | 1.25 | 1.37 | 2.05 |
| Financial leverage ratio | 2.50 | 2.98 | 3.30 | 3.45 | 4.35 |
The solvency ratios of Clearwater Paper Corp show a positive trend over the past five years, indicating an improvement in the company's ability to meet its long-term debt obligations.
The debt-to-assets ratio has decreased from 0.48 in 2019 to 0.28 in 2023, suggesting that Clearwater Paper Corp has been able to reduce its reliance on debt to finance its assets, resulting in a stronger financial position in terms of asset coverage.
Similarly, the debt-to-capital and debt-to-equity ratios have also shown a declining trend over the years, indicating a decreasing level of financial leverage and a higher proportion of capital or equity financing compared to debt. The debt-to-capital ratio has decreased from 0.68 in 2019 to 0.41 in 2023, while the debt-to-equity ratio has decreased from 2.09 in 2019 to 0.69 in 2023.
Furthermore, the financial leverage ratio, which measures the company's reliance on debt financing, has also witnessed a downward trend from 4.35 in 2019 to 2.50 in 2023. This indicates that Clearwater Paper Corp has been successful in reducing its overall level of debt relative to its equity, leading to a more stable and less risky capital structure.
Overall, the improving solvency ratios suggest that Clearwater Paper Corp has been effectively managing its debt levels and strengthening its financial position, which bodes well for its long-term sustainability and ability to weather economic downturns.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 5.52 | 3.13 | -0.02 | 3.21 | 0.84 |
The interest coverage ratio for Clearwater Paper Corp has shown a positive trend over the past five years, indicating an improvement in the company's ability to meet its interest obligations. The ratio stood at 6.31 in 2023, reflecting a significant increase compared to 3.68 in 2022 and 1.98 in 2021. This demonstrates that Clearwater Paper's earnings before interest and taxes (EBIT) are more than sufficient to cover its interest expenses, providing a healthy buffer against potential financial distress. The steady improvement in the interest coverage ratio suggests enhanced financial stability and reduced default risk for the company.