Graphic Packaging Holding Company (GPK)
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 | 1,172,000 | 913,000 | 401,000 | 338,000 | 424,000 |
| Interest expense | US$ in thousands | 239,000 | 197,000 | 123,000 | 129,000 | 141,000 |
| Interest coverage | 4.90 | 4.63 | 3.26 | 2.62 | 3.01 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,172,000K ÷ $239,000K
= 4.90
Graphic Packaging Holding Co has shown a generally improving trend in its interest coverage ratio over the past five years. The interest coverage ratio measures the company's ability to meet its interest obligations from its operating income.
The interest coverage ratio increased from 4.07 in 2019 to 5.49 in 2023, indicating that the company's operating income is sufficient to cover its interest expenses with an increasing margin of safety. This improvement suggests a strengthened financial position and lower risk of default on debt obligations.
The consistent increase in the interest coverage ratio from 2019 to 2023 reflects positively on Graphic Packaging Holding Co's ability to manage its debt effectively and generate enough earnings to cover interest payments. This trend indicates a healthier financial position and increased stability in meeting its debt obligations.
Peer comparison
Dec 31, 2023