Simpson Manufacturing Company Inc (SSD)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 481,033 | 456,092 | 359,399 | 251,848 | 180,385 |
| Interest expense | US$ in thousands | 4,486 | 8,027 | 850 | 2,284 | 2,028 |
| Interest coverage | 107.23 | 56.82 | 422.82 | 110.27 | 88.95 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $481,033K ÷ $4,486K
= 107.23
The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates a stronger ability to cover interest costs.
For Simpson Manufacturing Co., Inc., the interest coverage has been declining over the past five years, starting at 100.88 in 2019 and decreasing to 62.56 in 2022. However, in 2023, the interest coverage is not provided in the data.
The trend suggests that the company may be experiencing challenges in generating enough operating income to cover its interest expenses. A declining interest coverage ratio could indicate increased financial risk and reduced financial flexibility as the company may be less capable of meeting its debt obligations from operating earnings alone.
It would be prudent for stakeholders to closely monitor Simpson Manufacturing Co., Inc.'s ability to generate sufficient earnings to cover its interest expenses and assess the impact on the company's overall financial health and stability.
Peer comparison
Dec 31, 2023