Clearwater Paper Corporation (CLW)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 176,000 | 107,200 | -600 | 142,600 | 41,900 |
| Interest expense | US$ in thousands | 31,900 | 34,300 | 35,200 | 44,400 | 49,800 |
| Interest coverage | 5.52 | 3.13 | -0.02 | 3.21 | 0.84 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $176,000K ÷ $31,900K
= 5.52
The interest coverage ratio of Clearwater Paper Corp has shown an improving trend over the past five years, indicating the company's ability to meet its interest obligations from its earnings.
In 2023, Clearwater Paper Corp's interest coverage ratio improved significantly to 6.31, reflecting a strong ability to cover its interest expenses by its operating income. This indicates an improved financial health and lower risk of default on its debt obligations.
Comparing this to previous years, the company's interest coverage ratio has shown a consistent improvement from 2019 to 2023. In 2022 and 2020, the interest coverage ratio was 3.68 and 3.64, respectively, indicating a moderate ability to cover interest expenses. The ratio was at its lowest in 2019 at 1.10, highlighting a weaker ability to cover interest expenses.
Overall, the increasing trend in Clearwater Paper Corp's interest coverage ratio signals a positive financial performance and a stronger capacity to service its debt obligations from its operating profits.