Sotera Health Co (SHC)
Interest coverage
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 276,692 | 232,836 | 219,933 | 228,224 | 248,350 | 254,608 | 257,084 | 263,861 | 256,733 |
| Interest expense (ttm) | US$ in thousands | 25,645 | 15,098 | 14,111 | 13,331 | 12,835 | 9,237 | 9,358 | 9,518 | 9,767 |
| Interest coverage | 10.79 | 15.42 | 15.59 | 17.12 | 19.35 | 27.56 | 27.47 | 27.72 | 26.29 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $276,692K ÷ $25,645K
= 10.79
The interest coverage ratio for Sotera Health Co has shown a declining trend over the past few quarters. The ratio has decreased from a high of 4.42 in Q2 2022 to 1.94 in Q4 2023. This suggests that the company's ability to cover its interest payments with its operating profits has weakened over time. A decreasing trend in the interest coverage ratio may indicate increasing financial risk, as lower levels of coverage can make it more challenging for the company to meet its debt obligations. It would be prudent for stakeholders to closely monitor this trend and assess the company's ability to generate sufficient earnings to cover its interest expenses in the future.
Peer comparison
Dec 31, 2023