Olin Corporation (OLN)
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 | 326,200 | 42,900 | 1,819,900 | 1,732,700 | -727,700 |
| Interest expense | US$ in thousands | 184,500 | 181,100 | 143,900 | 348,000 | 292,700 |
| Interest coverage | 1.77 | 0.24 | 12.65 | 4.98 | -2.49 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $326,200K ÷ $184,500K
= 1.77
The interest coverage ratio of Olin Corporation has shown significant fluctuations over the past five years. In December 2020, the ratio was negative at -2.49, indicating that the company's operating income was insufficient to cover its interest expenses. However, by December 2021, the ratio improved to 4.98, suggesting that the company's ability to cover interest payments had strengthened.
The trend continued to improve in December 2022, with the interest coverage ratio increasing to 12.65, signaling a significant enhancement in the company's financial health and capacity to meet its interest obligations. However, this positive trend was not sustained, as by December 2023, the interest coverage ratio dropped sharply to 0.24, indicating a potential strain on the company's resources to cover interest costs.
In December 2024, the ratio improved slightly to 1.77, but it remained relatively low compared to the previous year's peak. The fluctuation in Olin Corporation's interest coverage ratio suggests varying levels of financial stability and operational efficiency over the period under review, highlighting the importance of closely monitoring the company's ability to cover interest expenses in relation to its operating income.
Peer comparison
Dec 31, 2024