Sylvamo Corp (SLVM)
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 | 458,000 | 433,000 | 539,000 | 359,000 | 198,000 |
| Interest expense | US$ in thousands | 39,000 | 60,000 | 69,000 | 31,000 | 4,000 |
| Interest coverage | 11.74 | 7.22 | 7.81 | 11.58 | 49.50 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $458,000K ÷ $39,000K
= 11.74
The interest coverage ratio for Sylvamo Corp has shown a significant decrease over the years. In December 2020, the interest coverage ratio was notably high at 49.50, indicating the company's strong ability to cover its interest expenses with its earnings. However, there has been a considerable decline in this ratio over the subsequent years.
By December 2021, the interest coverage ratio had dropped to 11.58, and it continued to decrease further to 7.81 by December 2022. This declining trend persisted, with the ratio reaching 7.22 in December 2023.
There was a slight improvement in December 2024, with the interest coverage ratio rising to 11.74. Overall, the decreasing trend in the interest coverage ratio raises concerns about Sylvamo Corp's ability to comfortably meet its interest obligations with its operating income. Further analysis and monitoring of the company's financial performance and debt management may be warranted to address this trend.
Peer comparison
Dec 31, 2024