Simpson Manufacturing Company Inc (SSD)
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 | 436,314 | 481,033 | 456,092 | 359,399 | 251,848 |
| Interest expense | US$ in thousands | 2,271 | 4,486 | 8,027 | 850 | 2,284 |
| Interest coverage | 192.12 | 107.23 | 56.82 | 422.82 | 110.27 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $436,314K ÷ $2,271K
= 192.12
Simpson Manufacturing Company Inc's interest coverage ratio indicates its ability to cover interest expenses with its earnings before interest and taxes (EBIT). The interest coverage ratio has fluctuated over the years, starting at a high of 110.27 in 2020, significantly increasing to 422.82 in 2021, and then decreasing to 56.82 in 2022.
The substantial increase in interest coverage in 2021 suggests that the company generated significantly higher EBIT relative to its interest expenses. However, the sharp decline in 2022 could indicate a possible decrease in earnings relative to interest costs, raising concerns about the company's ability to cover its interest payments comfortably.
Despite the drop in 2022, the interest coverage ratio recovered in the following years, reaching 107.23 in 2023 and 192.12 in 2024. This improvement suggests that the company was able to enhance its earnings or manage its interest expenses more effectively during these periods.
Overall, while the fluctuation in Simpson Manufacturing Company Inc's interest coverage ratio raises some concerns about its financial stability and ability to meet interest obligations in certain years, the subsequent recovery indicates the company's resilience in managing its financial leverage and generating sufficient profits to cover its interest expenses.
Peer comparison
Dec 31, 2024