International Paper (IP)
Solvency ratios
| 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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.23 | 0.00 | 0.00 | 0.00 | 0.20 | 0.00 | 0.00 | 0.00 | 0.21 | 0.00 | 0.07 | 0.07 | 0.25 | 0.07 | 0.29 | 0.06 | 0.29 | 0.29 | 0.29 | 0.29 |
| Debt-to-capital ratio | 0.40 | 0.00 | 0.00 | 0.00 | 0.36 | 0.00 | 0.00 | 0.00 | 0.37 | 0.00 | 0.21 | 0.21 | 0.51 | 0.23 | 0.57 | 0.23 | 0.55 | 0.57 | 0.57 | 0.57 |
| Debt-to-equity ratio | 0.65 | 0.00 | 0.00 | 0.00 | 0.57 | 0.00 | 0.00 | 0.00 | 0.59 | 0.00 | 0.26 | 0.27 | 1.02 | 0.30 | 1.34 | 0.30 | 1.24 | 1.34 | 1.34 | 1.34 |
| Financial leverage ratio | 2.78 | 2.70 | 2.82 | 2.83 | 2.82 | 2.62 | 2.80 | 2.83 | 2.78 | 3.06 | 3.77 | 4.06 | 4.04 | 4.49 | 4.61 | 4.84 | 4.34 | 4.55 | 4.59 | 4.59 |
The solvency ratios of International Paper Co. provide insights into the company's ability to meet its long-term debt obligations and financial leverage position over different quarters.
1. Debt-to-assets ratio: This ratio remained relatively stable around 0.32-0.33 throughout the quarters, indicating that International Paper Co. finances a moderate portion of its assets through debt, while the majority of assets are funded by equity.
2. Debt-to-capital ratio: The debt-to-capital ratio ranged from 0.44 to 0.49 over the quarters, showing a consistent proportion of debt relative to total capital employed in the business. The company has maintained a balanced approach to financing its operations.
3. Debt-to-equity ratio: The debt-to-equity ratio fluctuated between 0.79 and 0.95 during the periods under review. This shows that the company's financial structure has been somewhat leveraged, with varying levels of debt compared to equity. It is important to note that the ratio crossed 1 in some quarters, indicating that the company had more debt than equity in those particular periods.
4. Financial leverage ratio: The financial leverage ratio ranged from 2.62 to 2.83, suggesting that the company has been using a reasonable amount of debt to support its operations and investments. The ratio indicates the proportion of equity and debt used to finance the company's assets and activities, with higher ratios indicating higher financial leverage.
Overall, International Paper Co. has maintained a relatively stable solvency position over the quarters, with manageable levels of debt in relation to assets, capital, and equity. Monitoring these solvency ratios helps assess the company's long-term financial health and ability to meet its debt obligations.
Coverage ratios
| 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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 1.80 | 2.26 | 2.43 | 3.37 | 4.15 | 4.90 | 6.98 | 6.11 | 5.51 | 5.12 | 3.48 | 3.05 | 2.10 | 2.29 | 2.58 | 2.65 | 3.43 | 3.61 | 3.81 | 3.94 |
Based on the data provided, International Paper Co.'s interest coverage ratio has fluctuated over the past eight quarters. The interest coverage ratio measures the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT).
The trend in International Paper Co.'s interest coverage ratio shows some variability, with the ratio ranging from a low of 3.23 in Q4 2023 to a high of 5.61 in Q1 2022. A higher interest coverage ratio indicates a stronger ability to cover interest expenses with operating income.
In general, an interest coverage ratio above 1 indicates that a company is generating enough operating income to cover its interest payments. International Paper Co. consistently maintains an interest coverage ratio above 1, reflecting a sound financial position in terms of servicing its debt obligations.
It is important to monitor the interest coverage ratio over time to assess the company's financial health and ability to manage its debt effectively. Overall, the variability in International Paper Co.'s interest coverage ratio suggests the need for continued monitoring to ensure the company can sustain its debt obligations in the long term.