Packaging Corp of America (PKG)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.01 | 2.17 | 2.18 | 2.17 | 2.29 |
Packaging Corp of America maintains a strong solvency position, as indicated by consistently low debt-to-assets, debt-to-capital, and debt-to-equity ratios of 0.00 across the years 2020 to 2024. This implies that the company has minimal debt relative to its total assets, capital, and equity, reflecting a prudent approach to managing its financial obligations.
The financial leverage ratio, which measures the company's reliance on debt financing, has shown a downward trend from 2.29 in 2020 to 2.01 in 2024. This decreasing trend suggests that the company has been gradually reducing its financial leverage over the years, indicating a lower risk of financial distress and greater stability in its capital structure.
Overall, Packaging Corp of America's solvency ratios demonstrate a sound financial position characterized by a conservative debt structure and effective management of leverage, positioning the company well to weather economic uncertainties and pursue growth opportunities.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 26.71 | 20.03 | 20.39 | 8.27 | 7.77 |
The interest coverage ratio of Packaging Corp of America has shown a positive trend over the past five years, indicating the company's ability to meet its interest obligations through its operating profits.
As of December 31, 2020, the interest coverage ratio was 7.77, which improved to 8.27 by December 31, 2021, demonstrating a modest increase in the company's ability to cover its interest expenses. Subsequently, there was a significant improvement in the interest coverage ratio to 20.39 by December 31, 2022, and further to 20.03 by December 31, 2023.
The latest data, as of December 31, 2024, shows a notable enhancement in the interest coverage ratio to 26.71, reflecting a robust ability of Packaging Corp of America to comfortably meet its interest payments using its operating income.
Overall, the progressive improvement in the interest coverage ratio signifies the company's strengthened financial position and ability to manage its debt obligations effectively over the years, instilling confidence in its financial stability.