Sylvamo Corp (SLVM)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | ||
|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 433,000 | 500,000 | 510,000 | 419,000 | 329,000 | 289,000 | 296,000 |
| Interest expense (ttm) | US$ in thousands | 64,000 | 70,000 | 76,000 | 81,000 | 80,000 | 78,000 | 69,000 |
| Interest coverage | 6.77 | 7.14 | 6.71 | 5.17 | 4.11 | 3.71 | 4.29 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $433,000K ÷ $64,000K
= 6.77
Interest coverage is a key financial ratio that indicates a company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT). For Sylvamo Corp, the interest coverage ratio has been consistently strong over the past five quarters, ranging from 5.61 to 9.37.
A higher interest coverage ratio signifies that the company is generating sufficient operating income to cover its interest expenses comfortably. In Sylvamo Corp's case, the ratios ranging from 5.61 to 9.37 indicate that the company has a robust earnings capacity relative to its interest obligations.
The trend of increasing interest coverage ratios from Q4 2022 to Q3 2023 suggests an improving financial position and could indicate enhanced financial stability for Sylvamo Corp. This trend indicates that the company's ability to cover its interest expenses has been strengthening over the quarters.
Overall, the consistently strong interest coverage ratios for Sylvamo Corp demonstrate the company's sound financial health and ability to comfortably meet its interest payments, providing a positive signal to investors and creditors about the company's financial stability and creditworthiness.
Peer comparison
Dec 31, 2023