Graphic Packaging Holding Company (GPK)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,084,000 | 1,131,000 | 1,120,000 | 1,172,000 | 1,152,000 | 1,161,000 | 1,047,000 | 913,000 | 727,000 | 554,000 | 494,000 | 401,000 | 435,200 | 417,200 | 424,200 | 338,200 | 302,700 | 303,600 | 325,900 | 423,800 |
| Interest expense (ttm) | US$ in thousands | 229,000 | 238,000 | 240,000 | 239,000 | 234,000 | 225,000 | 213,000 | 197,000 | 178,000 | 154,000 | 135,000 | 123,000 | 121,000 | 124,000 | 125,000 | 129,000 | 130,600 | 134,500 | 140,000 | 141,000 |
| Interest coverage | 4.73 | 4.75 | 4.67 | 4.90 | 4.92 | 5.16 | 4.92 | 4.63 | 4.08 | 3.60 | 3.66 | 3.26 | 3.60 | 3.36 | 3.39 | 2.62 | 2.32 | 2.26 | 2.33 | 3.01 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,084,000K ÷ $229,000K
= 4.73
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates a stronger financial position and lower risk of default.
Analyzing the interest coverage ratio of Graphic Packaging Holding Company from December 2019 to December 2024 reveals the following trends:
- The interest coverage ratio fluctuated during this period, ranging from a low of 2.26 in June 2020 to a peak of 5.16 in June 2023.
- The ratio generally showed an improving trend from 2019 to 2023, indicating the company's increasing ability to cover its interest expenses with its operating income.
- However, there was a slight decline in the interest coverage ratio in the latter part of the period, with the ratio decreasing to 4.73 in December 2024.
- Overall, Graphic Packaging Holding Company demonstrated solid interest coverage ratios throughout the analyzed period, staying above the threshold of 2, which is typically considered a minimum acceptable level for most industries.
Investors and creditors may view Graphic Packaging Holding Company's interest coverage ratio positively as it indicates the company's ability to meet its interest obligations comfortably, though monitoring this ratio in the future is crucial to assess the company's financial health and risk of default.
Peer comparison
Dec 31, 2024