Smurfit WestRock plc (SW)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Dec 31, 2022 | Jun 30, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | — | 0.00 | — | 0.00 | 0.00 | — | — |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | — | 0.00 | — | 0.00 | 0.00 | — | — |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | — | 0.00 | — | 0.00 | 0.00 | — | — |
| Financial leverage ratio | 2.52 | 2.51 | 1.92 | — | 2.27 | — | 2.32 | 2.48 | — | — |
From the provided data on Smurfit WestRock plc's solvency ratios:
1. Debt-to-assets ratio: This ratio measures the percentage of the company's assets financed by debt. Smurfit WestRock plc has consistently maintained a debt-to-assets ratio of 0.00 from December 2022 to December 2024. This indicates that the company has not relied heavily on debt to fund its assets, which is a positive sign for solvency.
2. Debt-to-capital ratio: This ratio shows the proportion of the company's capital that is financed through debt. Similar to the debt-to-assets ratio, Smurfit WestRock plc has maintained a debt-to-capital ratio of 0.00 from December 2022 to December 2024. This suggests that the company's capital structure is not heavily reliant on debt financing.
3. Debt-to-equity ratio: The debt-to-equity ratio indicates the extent to which a company is financed by debt relative to its equity. Smurfit WestRock plc also shows a consistent debt-to-equity ratio of 0.00 from December 2022 to December 2024. This implies that the company's financial leverage from debt is minimal compared to its equity.
4. Financial leverage ratio: The financial leverage ratio measures the company's level of debt in relation to its equity and assets. Smurfit WestRock plc's financial leverage ratio has slightly fluctuated, starting at 2.48 in December 2022, decreasing to 1.92 in June 2024, and then increasing to 2.52 by December 2024. These variations suggest some changes in the company's leverage position over the years, but overall, the ratio remains within a manageable range.
In summary, based on the solvency ratios analyzed for Smurfit WestRock plc, the company demonstrates a conservative approach to debt management and maintains a stable solvency position, which is crucial for long-term financial stability and sustainability.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Dec 31, 2022 | Jun 30, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | -0.58 | 0.69 | 2.40 | 7.38 | 8.09 | 9.65 | 10.29 | 10.04 | 9.47 | 8.03 |
The interest coverage ratio measures a company's ability to meet its interest obligations through its operating income. Smurfit WestRock plc's interest coverage has shown fluctuating trends based on the provided data.
As of December 31, 2021, the interest coverage ratio was 8.03, indicating that the company's operating income was able to cover its interest payments approximately 8 times. By June 30, 2022, the ratio improved to 9.47, suggesting a stronger ability to cover interest expenses.
The interest coverage ratio continued to increase, reaching 10.04 by December 31, 2022, and further improving to 10.29 by June 30, 2023, reflecting a consistent and healthy ability to cover interest payments.
However, the ratio started to decline after June 30, 2023, with a value of 9.65 as of September 30, 2023, and further decreasing to 8.09 by December 31, 2023. By March 31, 2024, the ratio dropped significantly to 7.38, indicating a potential strain on the company's ability to cover interest expenses.
The interest coverage ratio experienced a sharp decline to 2.40 by June 30, 2024, followed by a significant decrease to 0.69 by September 30, 2024, and turning negative to -0.58 by December 31, 2024. These falling ratios suggest that Smurfit WestRock plc may be facing challenges in generating enough operating income to cover its interest payments, potentially indicating financial distress.
In conclusion, the interest coverage ratio of Smurfit WestRock plc has demonstrated varying performances over the periods indicated, with initial strength giving way to concerning weaknesses in the ability to meet interest obligations. It is essential for stakeholders to closely monitor the company's financial health and management of its interest payments in light of these fluctuations.