Smurfit WestRock plc (SW)
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 | — | 1,362,960 | 1,601,660 | 1,251,760 | 1,220,280 |
| Interest expense | US$ in thousands | 398,000 | 196,761 | 158,000 | 128,000 | 140,000 |
| Interest coverage | 0.00 | 6.93 | 10.14 | 9.78 | 8.72 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $398,000K
= 0.00
The interest coverage ratio for Smurfit WestRock plc has shown a generally positive trend over the past few years. Starting at a healthy 8.72 in December 2020, it increased to 9.78 by December 2021 and further to 10.14 by December 2022, indicating the company's improving ability to meet its interest obligations through its operating income.
However, there was a notable decrease in the interest coverage ratio to 6.93 by December 2023, which may raise concerns about the company's ability to cover its interest expenses comfortably. Additionally, the ratio dropping to 0.00 by December 2024 is a serious red flag, suggesting the company's operating income may not be sufficient to cover its interest payments during that period.
Overall, while Smurfit WestRock plc has demonstrated solid interest coverage in recent years, the significant drop in the ratio in 2023 and the complete inability to cover interest expenses in 2024 highlight potential financial challenges that the company may face in the upcoming periods.
Peer comparison
Dec 31, 2024