Louisiana-Pacific Corporation (LPX)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.14 | 0.14 | 0.15 | 0.16 | 0.17 |
| Debt-to-capital ratio | 0.17 | 0.18 | 0.19 | 0.22 | 0.22 |
| Debt-to-equity ratio | 0.21 | 0.22 | 0.24 | 0.28 | 0.28 |
| Financial leverage ratio | 1.54 | 1.57 | 1.64 | 1.78 | 1.69 |
Louisiana-Pacific Corporation's solvency ratios demonstrate a positive trend over the period from December 31, 2020, to December 31, 2024. The Debt-to-assets ratio has decreased steadily from 0.17 in 2020 to 0.14 in 2024, indicating that the company's reliance on debt in relation to its total assets has declined. Similarly, the Debt-to-capital ratio and Debt-to-equity ratio have decreased from 0.22 and 0.28 in 2020 to 0.17 and 0.21 in 2024, respectively.
Additionally, the Financial leverage ratio has also improved from 1.69 in 2020 to 1.54 in 2024, reflecting a reduction in the company's financial leverage and a stronger equity position relative to its total assets. This overall improvement in solvency ratios suggests that Louisiana-Pacific Corporation has been effectively managing its debt levels and enhancing its financial stability over the analyzed period.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 41.00 | 15.82 | 98.14 | 119.60 | 37.47 |
Louisiana-Pacific Corporation's interest coverage ratio has displayed significant fluctuations over the years, indicating varying levels of ability to cover interest expenses with operating income. In December 2020, the interest coverage ratio stood at 37.47, suggesting that the company was generating operating income 37.47 times the amount needed to cover interest expenses. This ratio improved considerably by December 2021, reaching 119.60, indicating a stronger ability to cover interest costs.
The trend continued to be positive in December 2022 with an interest coverage ratio of 98.14, reflecting a robust financial position. However, there was a notable decline in December 2023, as the ratio dropped to 15.82, signaling a potential strain on the company's ability to meet interest obligations from operating income alone.
By December 2024, the interest coverage ratio increased to 41.00, showing an improvement compared to the previous year but still lower than the levels seen in 2021 and 2022. Overall, the fluctuating nature of Louisiana-Pacific Corporation's interest coverage ratio highlights the importance of closely monitoring the company's financial performance and leverage to ensure sustainable operations and meet debt obligations effectively.