Stepan Company (SCL)
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 | 81,310 | 71,636 | 72,172 | 71,269 | 72,647 | 76,488 | 106,159 | 167,069 | 209,312 | 220,566 | 206,074 | 183,990 | 174,436 | 183,145 | 179,953 | 167,765 | 153,860 | 142,641 | 133,764 | 130,504 |
| Interest expense (ttm) | US$ in thousands | 3,621 | 6,050 | 5,416 | 9,281 | 12,103 | 12,229 | 11,463 | 10,325 | 9,809 | 9,572 | 8,950 | 7,790 | 7,008 | 5,984 | 6,011 | 5,703 | 5,409 | 5,026 | 4,802 | 5,309 |
| Interest coverage | 22.46 | 11.84 | 13.33 | 7.68 | 6.00 | 6.25 | 9.26 | 16.18 | 21.34 | 23.04 | 23.03 | 23.62 | 24.89 | 30.61 | 29.94 | 29.42 | 28.45 | 28.38 | 27.86 | 24.58 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $81,310K ÷ $3,621K
= 22.46
Stepan Company's interest coverage ratio has exhibited fluctuation over the past few years. The trend indicates that the company's ability to cover interest expenses with its earnings has varied significantly.
From March 31, 2020, to December 31, 2021, the interest coverage ratio consistently improved, reaching its peak at 30.61 on September 30, 2021. This upward movement suggests that Stepan Company was increasingly capable of meeting its interest obligations with its operating income during this period.
However, from March 31, 2022, to December 31, 2024, the interest coverage ratio declined consistently. The ratio dropped to its lowest point of 6.00 on December 31, 2023, indicating a significant decrease in the company's ability to cover its interest expenses with its earnings. This downward trend raises concerns about the company's financial health and its ability to service its debt.
The significant variability in Stepan Company's interest coverage ratio highlights the importance of closely monitoring its financial performance and managing its interest expenses effectively to ensure long-term financial stability and sustainability.
Peer comparison
Dec 31, 2024