Simpson Manufacturing Company Inc (SSD)
Interest coverage
| 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 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 475,150 | 482,334 | 464,936 | 452,991 | 459,065 | 477,390 | 455,194 | 423,846 | 367,792 | 310,188 | 300,912 | 271,396 | 252,363 | 249,516 | 219,140 | 200,581 | 181,254 | 163,473 | 162,184 | 169,964 |
| Interest expense (ttm) | US$ in thousands | 5,940 | 10,594 | 9,302 | 8,597 | 8,027 | 848 | 848 | 849 | 851 | 2,259 | 2,266 | 2,274 | 2,283 | 2,001 | 2,010 | 2,019 | 2,028 | 293 | 335 | 501 |
| Interest coverage | 79.99 | 45.53 | 49.98 | 52.69 | 57.19 | 562.96 | 536.79 | 499.23 | 432.19 | 137.31 | 132.79 | 119.35 | 110.54 | 124.70 | 109.02 | 99.35 | 89.38 | 557.93 | 484.13 | 339.25 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $475,150K ÷ $5,940K
= 79.99
Interest coverage is a financial ratio that measures a company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio indicates that the company is more capable of servicing its debt obligations.
Looking at the data provided for Simpson Manufacturing Co., Inc., we can see that the interest coverage ratio fluctuated over the past eight quarters. In Q4 2023, the interest coverage ratio was not provided, making it difficult to assess the company's ability to cover its interest expenses in that specific period.
However, in Q3 2023, the interest coverage ratio was very high at 615.58, indicating a strong ability to pay interest expenses with operating income. This substantial increase from the previous quarter may suggest improved profitability and/or lower interest expenses.
In Q2 2023 and Q1 2023, the interest coverage ratios were 93.19 and 60.05, respectively, showing a decreasing trend compared to Q3 2023. While both ratios are still considered healthy, the declining trend may warrant further investigation into the company's financial health and the sustainability of its ability to meet interest obligations.
Comparing the Q2 and Q1 2023 ratios to the ratios of the same quarters in 2022, we can see a noticeable decline in Q1 2023 compared to Q1 2022, which had an interest coverage ratio of 185.76. This indicates a potential deterioration in the company's ability to cover interest expenses in the short term.
Overall, while Simpson Manufacturing Co., Inc. exhibited strong interest coverage ratios in some quarters, the fluctuations observed in the data suggest the need for continuous monitoring of the company's financial performance and debt management practices.
Peer comparison
Dec 31, 2023