Smurfit WestRock plc (SW)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,423,000 | 1,596,000 | 1,072,000 | 920,000 |
| Interest expense | US$ in thousands | 178,000 | 158,000 | 128,000 | 140,000 |
| Interest coverage | 7.99 | 10.10 | 8.38 | 6.57 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,423,000K ÷ $178,000K
= 7.99
Smurfit WestRock plc's interest coverage ratio has shown fluctuations over the past four years. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt with its operating income.
In 2023, the interest coverage ratio was 7.99, indicating that the company generated operating income nearly 8 times greater than its interest expense for the year. This suggests that the company had a strong ability to cover its interest payments.
Comparing this to the previous years, we see a peak in 2022 with an interest coverage ratio of 10.10, which indicates a higher level of comfort in meeting interest obligations. The ratios for 2021 and 2020 were 8.38 and 6.57, respectively, indicating that the company's ability to cover interest payments fluctuated during those years.
Overall, the trend in Smurfit WestRock plc's interest coverage ratio demonstrates varying levels of ability to cover interest expenses over the past four years. It is important for investors and creditors to monitor this ratio to assess the company's financial health and its ability to service its debt obligations.
Peer comparison
Dec 31, 2023