Sealed Air Corporation (SEE)
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 | 777,500 | 782,900 | 804,600 | 816,700 | 800,800 | 837,500 | 853,100 | 864,600 | 937,000 | 977,000 | 947,200 | 915,600 | 868,800 | 836,700 | 831,400 | 823,500 | 808,000 | 760,600 | 719,100 | 612,400 |
| Interest expense (ttm) | US$ in thousands | 288,000 | 265,700 | 275,300 | 280,700 | 273,400 | 239,600 | 210,400 | 181,200 | 162,300 | 159,500 | 163,000 | 167,600 | 171,800 | 175,300 | 173,900 | 175,200 | 179,900 | 183,700 | 189,200 | 191,100 |
| Interest coverage | 2.70 | 2.95 | 2.92 | 2.91 | 2.93 | 3.50 | 4.05 | 4.77 | 5.77 | 6.13 | 5.81 | 5.46 | 5.06 | 4.77 | 4.78 | 4.70 | 4.49 | 4.14 | 3.80 | 3.20 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $777,500K ÷ $288,000K
= 2.70
Sealed Air Corporation's interest coverage ratio has shown a generally increasing trend from March 31, 2020, to September 30, 2022, indicating the company's ability to comfortably meet its interest payment obligations. The ratio stood at 3.20 on March 31, 2020, and consistently improved to reach a peak of 6.13 on September 30, 2022. This upward trajectory suggests that the company's earnings before interest and taxes (EBIT) have been more than sufficient to cover its interest expenses during this period.
However, from December 31, 2022, to December 31, 2024, the interest coverage ratio declined, indicating a potential increase in the financial risk for Sealed Air Corporation. The ratio dropped from 5.77 on December 31, 2022, to 2.70 on December 31, 2024. A decreasing interest coverage ratio could signal that the company may be facing challenges in generating enough operating income to cover its interest payments.
Overall, while Sealed Air Corporation's interest coverage ratio has displayed strength in the past, the recent decline calls for a closer examination of the company's financial health and its ability to manage its debt obligations effectively. Investors and stakeholders should keep a close watch on the company's future financial performance to assess any potential risks arising from its interest coverage ratio.
Peer comparison
Dec 31, 2024