Mativ Holdings Inc. (MATV)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -4,200 | -390,600 | -17,700 | 120,500 | 127,800 |
| Interest expense | US$ in thousands | 74,700 | 62,200 | 86,100 | 46,100 | 30,500 |
| Interest coverage | -0.06 | -6.28 | -0.21 | 2.61 | 4.19 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-4,200K ÷ $74,700K
= -0.06
Mativ Holdings Inc.'s interest coverage has shown a declining trend over the years. The interest coverage ratio was 4.19 as of December 31, 2020, indicating that the company was generating sufficient earnings to cover its interest expenses. However, this ratio deteriorated to 2.61 by December 31, 2021, suggesting a decrease in the company's ability to cover interest payments.
The trend worsened significantly in the following years, with interest coverage ratios dropping to -0.21 as of December 31, 2022, -6.28 by December 31, 2023, and -0.06 by December 31, 2024. A negative interest coverage ratio implies that the company's earnings are insufficient to cover its interest obligations, raising concerns about its financial stability and ability to meet debt payments.
The declining trend in Mativ Holdings Inc.'s interest coverage raises flags about its financial health and indicates potential difficulties in managing its debt obligations. Investors and creditors may view the deteriorating interest coverage ratio as a red flag, prompting further investigation into the company's financial position and risk of default.
Peer comparison
Dec 31, 2024