International Paper (IP)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 577,000 | 477,000 | 581,000 | 582,000 | 671,000 | 1,292,000 | 1,515,000 | 1,786,000 | 1,888,000 | 1,602,000 | 1,607,000 | 1,571,000 | 1,709,000 | 1,846,000 | 1,820,000 | 1,674,000 | 1,571,000 | 1,916,000 | 2,053,000 | 2,258,000 |
| Interest expense (ttm) | US$ in thousands | 323,000 | 325,000 | 332,000 | 284,000 | 237,000 | 238,000 | 303,000 | 318,000 | 325,000 | 342,000 | 312,000 | 295,000 | 318,000 | 341,000 | 360,000 | 419,000 | 444,000 | 458,000 | 469,000 | 475,000 |
| Interest coverage | 1.79 | 1.47 | 1.75 | 2.05 | 2.83 | 5.43 | 5.00 | 5.62 | 5.81 | 4.68 | 5.15 | 5.33 | 5.37 | 5.41 | 5.06 | 4.00 | 3.54 | 4.18 | 4.38 | 4.75 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $577,000K ÷ $323,000K
= 1.79
International Paper's interest coverage ratio measures its ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
Based on the provided data, International Paper's interest coverage ratio fluctuated over the analyzed period. It started at 4.75 in March 2020, decreased to 3.54 in December 2020, and then improved gradually reaching a peak of 5.81 in December 2022.
However, the interest coverage ratio declined notably to 2.05 in March 2024, and further dropped to 1.47 in September 2024. These lower ratios suggest that International Paper may be facing challenges in meeting its interest payments from its operating income during those periods.
Overall, fluctuations in the interest coverage ratio should be closely monitored by investors and analysts as they indicate the company's ability to service its debt obligations.
Peer comparison
Dec 31, 2024