Louisiana-Pacific Corporation (LPX)
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 | 574,000 | 562,000 | 611,000 | 398,000 | 270,000 | 182,000 | 289,000 | 788,000 | 1,374,000 | 1,636,000 | 1,843,000 | 1,986,000 | 1,796,000 | 1,836,000 | 1,598,000 | 972,000 | 580,000 | 244,000 | 7,000 | 5,000 |
| Interest expense (ttm) | US$ in thousands | 14,000 | 20,000 | 20,000 | 19,000 | 18,000 | 15,000 | 14,000 | 14,000 | 14,000 | 12,000 | 13,000 | 14,000 | 16,000 | 13,000 | 14,000 | 16,000 | 16,000 | 20,000 | 21,000 | 19,000 |
| Interest coverage | 41.00 | 28.10 | 30.55 | 20.95 | 15.00 | 12.13 | 20.64 | 56.29 | 98.14 | 136.33 | 141.77 | 141.86 | 112.25 | 141.23 | 114.14 | 60.75 | 36.25 | 12.20 | 0.33 | 0.26 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $574,000K ÷ $14,000K
= 41.00
Louisiana-Pacific Corporation's interest coverage ratio has shown significant fluctuations over the reporting periods. The interest coverage ratio, which measures the company's ability to meet its interest obligations with its earnings, was extremely low at the beginning of the analyzed period, decreasing from 0.26 on March 31, 2020, to 0.33 on June 30, 2020. This indicated that the company's earnings were insufficient to cover its interest expenses during that time.
However, there was a dramatic improvement in the company's interest coverage starting in the third quarter of 2020, with the ratio surging to 12.20 on September 30, 2020, and steadily increasing in subsequent quarters. Louisiana-Pacific's interest coverage continued to strengthen significantly, reaching its peak at 141.86 on March 31, 2022.
After this peak, the interest coverage ratio began to decline gradually through the end of the reporting period on December 31, 2024, settling at 41.00. While the ratio experienced a notable decrease from its highest level, it remained above 1, indicating that the company's earnings still comfortably covered its interest expenses during the most recent reporting period.
Overall, the trend in Louisiana-Pacific Corporation's interest coverage ratio demonstrates the company's ability to effectively manage its interest obligations and generate sufficient earnings to cover its interest expenses, despite some fluctuations over the analyzed period.
Peer comparison
Dec 31, 2024