Sylvamo Corp (SLVM)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 458,000 | 419,000 | 373,000 | 333,000 | 412,000 | 476,000 | 542,000 | 594,000 | 650,000 | 633,000 | 597,000 | 574,000 | 454,000 | 392,000 | 323,000 | 245,000 | 194,000 |
| Interest expense (ttm) | US$ in thousands | 39,000 | 38,000 | 33,000 | 36,000 | 34,000 | 39,000 | 100,000 | 105,000 | 250,000 | 256,000 | 196,000 | 208,000 | 56,000 | 56,000 | 46,000 | 17,000 | 17,000 |
| Interest coverage | 11.74 | 11.03 | 11.30 | 9.25 | 12.12 | 12.21 | 5.42 | 5.66 | 2.60 | 2.47 | 3.05 | 2.76 | 8.11 | 7.00 | 7.02 | 14.41 | 11.41 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $458,000K ÷ $39,000K
= 11.74
Sylvamo Corp's interest coverage ratio fluctuated over the period under review, reflecting its ability to meet its interest obligations relative to its earnings. The interest coverage ratio indicates how easily a company can pay its interest expenses with its operating income.
The interest coverage ratio for Sylvamo Corp was relatively strong at the end of March 2021 and September 2023, standing at 14.41 and 12.21 respectively. This suggests that the company had ample operating income to cover its interest expenses during those periods.
However, there were instances where the interest coverage ratio dropped significantly, such as at the end of March 2022 and September 2022, when the ratio fell to 2.76 and 2.47 respectively. These lower ratios indicate a potential strain on the company's ability to cover its interest payments with its operating income.
Overall, it is important for Sylvamo Corp to maintain a healthy interest coverage ratio to demonstrate its financial stability and ability to meet its debt obligations. This analysis underscores the importance of monitoring the company's financial performance closely, especially in relation to its interest coverage ratio, to ensure its long-term financial health.
Peer comparison
Dec 31, 2024