Silgan Holdings Inc (SLGN)
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 | 514,039 | 122,000 | 701,246 | 596,081 | 550,917 |
| Interest expense | US$ in thousands | 166,369 | 42,500 | 126,300 | 108,400 | 103,800 |
| Interest coverage | 3.09 | 2.87 | 5.55 | 5.50 | 5.31 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $514,039K ÷ $166,369K
= 3.09
Based on the data provided, Silgan Holdings Inc's interest coverage ratio has exhibited a generally stable trend over the past five years. The interest coverage ratio measures the company's ability to meet its interest payment obligations on its debt using its operating income.
In 2020, the interest coverage ratio was 5.31, indicating that Silgan Holdings Inc generated operating income 5.31 times greater than the interest expense for that year. The ratio slightly improved in 2021 to 5.50 and continued to increase in 2022 to 5.55. These ratios suggest that the company had sufficient earnings to comfortably cover its interest expenses during these years.
However, there was a noticeable decline in the interest coverage ratio in 2023 to 2.87, indicating that the company's ability to cover its interest expenses decreased significantly. This could raise concerns about the company's financial health and its ability to meet debt obligations.
In 2024, the interest coverage ratio improved slightly to 3.09, but it still remained below the levels seen in 2020 to 2022. It would be important for stakeholders to monitor this ratio closely in future periods to ensure that Silgan Holdings Inc can adequately service its debt and maintain financial stability.
Peer comparison
Dec 31, 2024