Packaging Corp of America (PKG)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,113,300 | 1,069,600 | 998,100 | 995,900 | 1,067,500 | 1,099,600 | 1,206,700 | 1,343,700 | 1,435,100 | 1,504,100 | 1,498,000 | 1,378,200 | 1,261,200 | 1,090,300 | 942,600 | 759,700 | 733,500 | 776,800 | 837,100 | 1,003,300 |
| Interest expense (ttm) | US$ in thousands | 41,400 | 40,800 | 43,400 | 47,600 | 53,400 | 57,400 | 61,600 | 65,800 | 70,200 | 135,300 | 142,700 | 148,800 | 152,500 | 96,700 | 97,200 | 97,400 | 93,500 | 129,800 | 127,000 | 124,300 |
| Interest coverage | 26.89 | 26.22 | 23.00 | 20.92 | 19.99 | 19.16 | 19.59 | 20.42 | 20.44 | 11.12 | 10.50 | 9.26 | 8.27 | 11.28 | 9.70 | 7.80 | 7.84 | 5.98 | 6.59 | 8.07 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,113,300K ÷ $41,400K
= 26.89
Packaging Corp of America's interest coverage ratio has shown fluctuating trends over the past few years.
Starting at 8.07 in March 2020, the interest coverage ratio decreased to 6.59 in June 2020 and further dropped to 5.98 in September 2020, indicating a potential strain on the company's ability to cover its interest expenses with its operating income.
However, there was a slight recovery as the ratio improved to 7.84 by December 2020 and remained relatively stable around 7.80 to 9.70 during the first half of 2021.
A significant improvement was observed in the second half of 2021, with the interest coverage ratio increasing to 11.28 in September 2021 and further rising to 26.89 by December 2024. These higher ratios suggest that Packaging Corp of America has significantly strengthened its ability to meet its interest obligations with its operating profits.
The overall trend indicates that the company's ability to cover its interest expenses has improved significantly over the years, reflecting positively on its financial health and capacity to manage debt obligations.
Peer comparison
Dec 31, 2024