Sylvamo Corp (SLVM)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 3.19 | 4.00 | 14.27 |
Sylvamo Corp's solvency ratios provide insights into the company's ability to meet its long-term financial obligations.
The debt-to-assets ratio has shown a declining trend from 0.54 in 2021 to 0.33 in 2023, indicating that the company has reduced its reliance on debt to finance its assets over the years. This is generally a positive sign as it suggests improved financial stability and lower risk of insolvency.
The debt-to-capital ratio has also decreased from 0.88 in 2021 to 0.52 in 2023. This shows that Sylvamo Corp has been able to lower the proportion of debt in its capital structure, which is beneficial in reducing financial risk and enhancing the company's financial health.
The debt-to-equity ratio, on the other hand, has experienced significant fluctuations, with a sharp decrease from 7.69 in 2021 to 1.06 in 2023. This indicates that the company has been reducing its debt relative to its equity, which is a positive development as it signifies a stronger financial position and better capacity to absorb financial shocks.
Finally, the financial leverage ratio has also shown a declining trend from 14.27 in 2021 to 3.19 in 2023. This indicates that Sylvamo Corp has been reducing its financial leverage over time, which is crucial for minimizing the risks associated with high debt levels and ensuring long-term financial stability.
Overall, based on these solvency ratios, it appears that Sylvamo Corp has been effectively managing its debt levels and improving its financial strength and stability over the past few years.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Interest coverage | 6.77 | 4.11 | 14.50 |
The interest coverage ratio is a measure of a company's ability to make interest payments on its debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
Analyzing Sylvamo Corp's interest coverage ratio over the past three years, we observe a decreasing trend from 2022 to 2023. In 2022, the interest coverage ratio was 7.77, indicating that the company generated sufficient earnings to cover its interest expenses nearly 8 times. However, in 2023, the interest coverage ratio decreased to 5.61, which may suggest a decline in the company's ability to service its interest payments.
It is important to note the absence of data for 2021 and 2020, which limits a comprehensive analysis of the trend over a longer period. Overall, the declining interest coverage ratio from 2022 to 2023 raises concerns about Sylvamo Corp's ability to meet its interest obligations, and further monitoring of the company's financial performance is recommended to assess its financial health.