Smurfit WestRock plc (SW)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | — | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | — | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | — | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | — | 2.27 | 2.48 | 2.67 | 2.73 |
Based on the provided data, it is evident that Smurfit WestRock plc has consistently maintained a strong solvency position over the last five years.
1. Debt-to-assets ratio: This ratio shows the proportion of a company's assets that are financed by debt. With a debt-to-assets ratio of 0.00 for each year from 2020 to 2023, it indicates that the company has not used debt to finance its assets during this period, which is a positive sign for solvency.
2. Debt-to-capital ratio: This ratio indicates the proportion of a company's capital structure that is debt. Smurfit WestRock plc has maintained a debt-to-capital ratio of 0.00 from 2020 to 2023, implying that the company has not relied on debt financing to fund its operations and investments.
3. Debt-to-equity ratio: This ratio compares a company's total debt to its total equity, reflecting the level of financial leverage. Similar to the debt-to-assets and debt-to-capital ratios, the debt-to-equity ratio for the company has been 0.00 from 2020 to 2023, suggesting a conservative approach to debt utilization.
4. Financial leverage ratio: This ratio measures the extent to which a company uses debt to finance its operations. Smurfit WestRock plc has shown a decreasing trend in the financial leverage ratio, from 2.73 in 2020 to 2.27 in 2023. A lower financial leverage ratio indicates lower reliance on debt, which may reduce financial risk.
Overall, the analysis of these solvency ratios indicates that Smurfit WestRock plc has maintained a solid financial position with minimal debt obligations, reflecting a cautious and sustainable approach to managing its capital structure and solvency.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 0.00 | 6.93 | 10.14 | 9.78 | 8.72 |
The interest coverage ratio for Smurfit WestRock plc has shown a generally positive trend over the years, standing at 8.72 in December 31, 2020, increasing to 9.78 by December 31, 2021, and further improving to 10.14 by December 31, 2022. However, there was a significant decline in the interest coverage ratio to 6.93 by December 31, 2023. The sharp drop in the ratio to 0.00 by December 31, 2024 suggests that the company may have faced challenges in generating enough earnings to cover its interest expenses entirely that year. The overall trend indicates mixed performance in managing its interest obligations, and this declining trend should be carefully monitored for its potential impact on the company's financial health and stability.