Mercer International Inc (MERC)

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 0.60 0.60 0.53 0.50 0.49 0.53 0.52 0.51 0.53 0.52 0.52 0.55 0.56 0.55 0.56 0.58 0.53 0.50 0.48 0.50
Debt-to-capital ratio 0.72 0.70 0.66 0.63 0.62 0.65 0.62 0.62 0.64 0.65 0.66 0.68 0.66 0.67 0.69 0.71 0.66 0.62 0.60 0.62
Debt-to-equity ratio 2.53 2.39 1.91 1.68 1.61 1.86 1.66 1.65 1.78 1.85 1.92 2.11 1.97 2.04 2.25 2.46 1.98 1.66 1.52 1.62
Financial leverage ratio 4.19 3.99 3.59 3.33 3.25 3.53 3.21 3.20 3.39 3.55 3.67 3.84 3.54 3.71 3.99 4.22 3.75 3.30 3.14 3.24

Mercer International Inc.'s solvency ratios indicate the company's ability to meet its financial obligations and manage debt efficiently. The debt-to-assets ratio has been increasing steadily, reaching 0.61 in Q4 2023, indicating that 61% of the company's assets are financed by debt. Similarly, the debt-to-capital and debt-to-equity ratios have also been trending upwards, highlighting higher reliance on debt in financing the company's operations.

The financial leverage ratio, which measures the extent to which the company is using debt to finance its assets, has also been increasing, reaching 4.19 in Q4 2023. This implies that for every dollar of equity, the company has $4.19 in total assets.

Overall, Mercer International Inc.'s solvency ratios suggest a higher level of leverage and financial risk as the company's debt levels have been increasing over the quarters. It is important for the company to carefully manage its debt levels to ensure long-term financial stability and sustainability.

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 -2.11 -1.05 0.35 3.35 5.38 6.66 6.83 5.96 4.84 3.09 1.69 1.12 0.78 -0.22 -0.15 0.21 1.13 3.32 4.33 4.77

Based on the interest coverage ratios provided for Mercer International Inc. over the specified quarters, we observe fluctuations in the company's ability to cover its interest expense with its earnings before interest and taxes (EBIT).

In Q4 2023 and Q3 2023, the interest coverage ratios were negative at -1.76 and -1.07, respectively, indicating that the company's EBIT was insufficient to cover its interest expense during these periods. This is a concerning trend as it suggests financial distress and potential difficulty in meeting debt obligations.

However, in Q2 2023, the interest coverage ratio improved to 0.36, though still below ideal levels, indicating some progress in covering interest expenses from operating profits. By Q1 2023, the ratio further improved to 3.42, reaching a level where the company's EBIT exceeded its interest expense, which is a positive sign of financial health.

Comparing to the previous year, Mercer International Inc. had stronger interest coverage ratios in Q4 2022, Q3 2022, Q2 2022, and Q1 2022, ranging from 5.49 to 6.99. These ratios indicate a more comfortable position in servicing its debt obligations from operating earnings during that period.

Overall, Mercer International Inc. experienced fluctuations in its interest coverage ratio, with recent quarters showing some concerning signs of struggling to cover interest expenses but also demonstrating improvements in subsequent periods. It is essential for investors and stakeholders to monitor these trends closely to assess the company's financial stability and ability to meet its debt obligations in the future.