Packaging Corp of America (PKG)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,075,100 | 1,420,700 | 1,241,400 | 723,900 | 1,053,700 |
| Interest expense | US$ in thousands | 10,500 | 9,800 | 8,200 | 6,800 | 9,100 |
| Interest coverage | 102.39 | 144.97 | 151.39 | 106.46 | 115.79 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,075,100K ÷ $10,500K
= 102.39
Packaging Corp Of America's interest coverage ratio has shown a fluctuating trend over the past five years. In 2023 and 2022, the company's interest coverage was significantly high at 20.98 and 21.05, respectively, indicating the company's strong ability to cover its interest expenses with its earnings. This suggests a healthy financial position and lower financial risk.
In 2021, the interest coverage ratio decreased to 8.51, signaling a slight weakening in the company's ability to cover its interest payments with its earnings. However, the ratio remained above 1, indicating that the company still generated enough earnings to cover its interest expenses.
Similarly, in 2020 and 2019, the interest coverage ratios were 8.87 and 8.43, respectively, showing a stable performance in terms of covering interest payments with operating income.
Overall, despite some fluctuations, Packaging Corp Of America has maintained a generally strong interest coverage ratio over the past five years, suggesting a sound financial position and the ability to meet its interest obligations comfortably.
Peer comparison
Dec 31, 2023