Sotera Health Co (SHC)
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 | 278,565 | 259,861 | -150,741 | 251,093 | 174,453 |
| Interest expense | US$ in thousands | 164,691 | 142,878 | 80,144 | 74,192 | 215,259 |
| Interest coverage | 1.69 | 1.82 | -1.88 | 3.38 | 0.81 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $278,565K ÷ $164,691K
= 1.69
Based on the data provided, Sotera Health Co's interest coverage ratio has shown fluctuations over the years. As of December 31, 2020, the interest coverage ratio was 0.81, indicating that the company's ability to cover its interest expenses with its operating income was weak. However, by December 31, 2021, the ratio improved significantly to 3.38, suggesting a better ability to meet interest obligations.
On December 31, 2022, the interest coverage ratio declined sharply to -1.88, implying that the company's operating income was not sufficient to cover its interest expenses, raising concerns about its financial health. The subsequent years showed some improvement, with ratios of 1.82 as of December 31, 2023, and 1.69 as of December 31, 2024.
Overall, the trend in Sotera Health Co's interest coverage ratio reflects varying levels of financial stability and ability to service its debt obligations. Investors and analysts should closely monitor the company's future performance to ensure sustained improvement in its ability to cover interest expenses.
Peer comparison
Dec 31, 2024