Packaging Corp of America (PKG)
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 | 1,105,800 | 1,067,400 | 1,435,200 | 1,261,100 | 726,200 |
| Interest expense | US$ in thousands | 41,400 | 53,300 | 70,400 | 152,400 | 93,500 |
| Interest coverage | 26.71 | 20.03 | 20.39 | 8.27 | 7.77 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,105,800K ÷ $41,400K
= 26.71
Packaging Corp of America's interest coverage ratio has shown a positive trend over the past five years, reflecting the company's improving ability to meet its interest obligations. The interest coverage ratio increased from 7.77 in December 31, 2020, to 26.71 in December 31, 2024. This suggests that the company's earnings before interest and taxes (EBIT) have been consistently strong enough to cover its interest expenses, indicating a healthy financial position. The significant increase in the interest coverage ratio from 2020 to 2024 also indicates improved financial stability and reduced risk of default on debt payments. Overall, the upward trend in the interest coverage ratio reflects favorable financial performance and indicates that Packaging Corp of America has been effectively managing its interest obligations.
Peer comparison
Dec 31, 2024