Sylvamo Corp (SLVM)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 3.07 | 3.19 | 4.00 | 14.27 | 1.38 |
Sylvamo Corp's solvency ratios, as indicated by the debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio, remained consistently at 0.00 across the years 2020 to 2024. This suggests that the company has not taken on any debt relative to its assets, capital, or equity during this period.
However, the financial leverage ratio tells a slightly different story. The financial leverage ratio was 1.38 in 2020, but it significantly increased to 14.27 in 2021, indicating a substantial increase in financial leverage. Over the following years, the ratio decreased to 4.00 in 2022, 3.19 in 2023, and 3.07 in 2024. While the ratio decreased after 2021, it remains at a level higher than the initial year, indicating that Sylvamo Corp has been utilizing more financial leverage to support its operations since 2021.
Overall, based on the solvency ratios, Sylvamo Corp appears to have a strong financial position with no significant debt obligations in relation to its assets, capital, or equity. However, the increasing financial leverage ratio suggests a shift towards more leveraged financing in recent years, which may warrant further investigation into the company's overall financial health and risk management strategies.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 11.74 | 7.22 | 7.81 | 11.58 | 49.50 |
Interest coverage ratio measures a company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT). In the case of Sylvamo Corp, the interest coverage ratio has shown a declining trend over the past five years. In 2020, the ratio was 49.50, indicating a strong ability to cover interest payments. However, this ratio decreased to 11.58 in 2021 and continued to decline to 7.81 in 2022, 7.22 in 2023, before slightly increasing to 11.74 in 2024.
A decreasing trend in the interest coverage ratio may signal that the company's earnings are becoming less sufficient to cover its interest expenses, which could potentially lead to financial strain if the trend continues. It is important for investors and creditors to monitor this ratio closely to assess the company's financial health and ability to meet its debt obligations.