Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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Solvency Ratios (Summary)
Sherwin-Williams Co., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
A comprehensive analysis of the solvency metrics from March 2022 through March 2026 reveals a consistent trend toward deleveraging and an improved overall risk profile. The company has successfully reduced its reliance on borrowed capital relative to equity and assets, while simultaneously strengthening its capacity to service interest obligations.
- Debt to Equity Dynamics
- A significant downward trend is observed in the debt-to-equity ratios. The standard debt-to-equity ratio decreased from 4.74 in March 2022 to a low of 2.36 by December 2025, ending the period at 2.64. When operating lease liabilities are included, the ratio similarly declined from 5.59 to 3.11. This indicates a substantial shift in the capital structure toward a higher proportion of equity financing.
- Capital and Asset Proportions
- Debt to capital and debt to assets ratios exhibit a more gradual and stable decline. The debt to capital ratio moved from 0.83 to 0.73, and the debt to assets ratio decreased from 0.49 to 0.44. These movements suggest a controlled reduction in total liabilities relative to the total asset base and total capital employed.
- Financial Leverage
- There is a marked contraction in financial leverage, which fell from a peak of 9.91 in June 2022 to a low of 5.63 in December 2025. This reduction aligns with the observed decrease in the debt-to-equity ratios, reflecting a diminished reliance on debt to amplify returns and a resulting reduction in long-term solvency risk.
- Interest Coverage and Debt Service
- The interest coverage ratio shows a strong overall improvement, rising from 7.47 in March 2022 to a peak of 9.32 in March 2024. Although a moderate decline occurred in the final year, ending at 7.83 in March 2026, the ratio remains higher than the baseline established in early 2022, signifying an enhanced ability to meet interest payments from operating earnings.
Debt Ratios
Coverage Ratios
Debt to Equity
Sherwin-Williams Co., debt to equity calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Short-term borrowings | |||||||||||||||||||||||
| Current portion of long-term debt | |||||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||
| Shareholders’ equity | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to equity1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||
| Linde plc | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q1 2026 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
An analysis of the solvency metrics from March 2022 through March 2026 reveals a consistent improvement in the capital structure, characterized by a significant reduction in the debt-to-equity ratio over the observed period.
- Debt to Equity Ratio Evolution
- The debt to equity ratio exhibited a marked downward trajectory, declining from a peak of 4.77 in June 2022 to a low of 2.36 in December 2025. A substantial deleveraging effect was observed throughout 2022 and 2023, during which the ratio dropped from approximately 4.7 to 2.6. From 2024 through early 2026, the ratio stabilized, fluctuating within a tighter range between 2.4 and 3.1, indicating a transition toward a more sustainable leverage profile.
- Shareholders' Equity Expansion
- The primary driver of the improved solvency position is the steady and significant growth in shareholders' equity. Equity increased from 2.23 billion US dollars in March 2022 to 4.43 billion US dollars by March 2026, nearly doubling over the period. This consistent growth in the equity base has served to offset the impact of total debt, thereby reducing the company's financial risk and reliance on external borrowing.
- Total Debt Dynamics
- Total debt remained relatively stable with periodic fluctuations, lacking a singular linear trend. Debt levels hovered around 10.5 billion US dollars in 2022, reached a period low of 9.85 billion US dollars in December 2023, and increased to 11.70 billion US dollars by March 2026. Because the growth in shareholders' equity significantly outpaced the increase in total debt, the overall solvency ratio improved even as absolute debt levels rose in the final quarters of the analysis.
Debt to Equity (including Operating Lease Liability)
Sherwin-Williams Co., debt to equity (including operating lease liability) calculation (quarterly data)
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q1 2026 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity
= ÷ =
The solvency profile indicates a substantial improvement in financial leverage from March 2022 through March 2026. The overall trajectory demonstrates a strengthening balance sheet, characterized by a significant increase in the equity base that has effectively offset fluctuations in total debt obligations.
- Total Debt Trends
- Total debt, including operating lease liabilities, remained relatively range-bound with moderate volatility. The balance fluctuated between a low of approximately $11.81 billion in December 2023 and a peak of $13.79 billion in March 2026. While debt levels rose in the final year of the period, the increases were less pronounced than the growth in equity.
- Shareholders' Equity Expansion
- A consistent upward trend in shareholders' equity is observed, with values increasing from $2.23 billion in March 2022 to $4.43 billion by March 2026. This growth represents a nearly 100% increase in the equity cushion, contributing significantly to the reduction of the overall solvency risk.
- Debt to Equity Ratio Analysis
- The debt-to-equity ratio experienced a marked decline, falling from a peak of 5.62 in June 2022 to 3.11 by March 2026. The most significant period of deleveraging occurred between June 2022 and September 2023, during which the ratio dropped from 5.62 to 3.14. Although the ratio exhibited some volatility—specifically a moderate increase in March 2024 and March 2026—the long-term trend reflects a shift toward a more conservative capital structure and improved solvency.
Debt to Capital
Sherwin-Williams Co., debt to capital calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Short-term borrowings | |||||||||||||||||||||||
| Current portion of long-term debt | |||||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||
| Shareholders’ equity | |||||||||||||||||||||||
| Total capital | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to capital1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||
| Linde plc | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q1 2026 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The analysis of solvency metrics from March 2022 through March 2026 reveals a general trend of improved capital structure efficiency, characterized by a gradual reduction in the reliance on debt relative to total capital.
- Debt to Capital Ratio Trends
- The ratio exhibited a consistent downward trajectory from a peak of 0.83 in the first quarter of 2022 to a low of 0.70 by December 2025. This indicates a strengthening of the solvency position over the observed period. While the ratio experienced a slight uptick to 0.73 by March 2026, it remains significantly lower than the levels recorded at the beginning of the analysis period.
- Total Debt Dynamics
- Total debt displayed notable volatility, fluctuating between a minimum of $9.85 billion in December 2023 and a maximum of $11.70 billion in March 2026. A distinct period of deleveraging occurred throughout 2023, followed by a phased increase in debt obligations starting in 2024, suggesting shifts in financing strategies or capital expenditures.
- Expansion of Total Capital
- Total capital grew steadily from $12.83 billion in March 2022 to $16.13 billion by March 2026. This consistent growth in the capital base has acted as a primary offset to increases in absolute debt, contributing to the overall decline in the debt-to-capital ratio and suggesting an increase in equity or other non-debt capital components.
Debt to Capital (including Operating Lease Liability)
Sherwin-Williams Co., debt to capital (including operating lease liability) calculation (quarterly data)
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q1 2026 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= ÷ =
The solvency profile of Sherwin-Williams Co. from March 2022 through March 2026 is characterized by a gradual reduction in leverage relative to total capital, despite fluctuations in absolute debt levels.
- Total Debt Trends
- Total debt, including operating lease liabilities, exhibited a non-linear trajectory. Initial levels remained stable around 12.5 billion USD throughout 2022, followed by a period of deleveraging that reached a trough of 11.8 billion USD by December 2023. From March 2024 onward, a general upward trend emerged, with debt levels peaking at 13.79 billion USD by March 2026.
- Total Capital Expansion
- Total capital showed a consistent long-term growth pattern, increasing from 14.72 billion USD in March 2022 to 18.22 billion USD by March 2026. While minor quarterly contractions occurred, most notably in late 2023, the overall expansion of the capital base provided a buffer that mitigated the impact of rising debt levels in the latter half of the period.
- Debt to Capital Ratio Analysis
- The debt to capital ratio decreased from a peak of 0.85 in the first half of 2022 to a low of 0.74, a level maintained periodically between June 2023 and December 2025. By March 2026, the ratio settled at 0.76. This downward trend indicates that the growth in total capital outpaced the growth in total debt, resulting in a improved solvency position and a lower proportion of debt-funded capital compared to the start of the analysis period.
Overall, the financial data reveals a strategic shift toward a lower leverage ratio. The company successfully reduced its debt-to-capital dependency by approximately 9 percentage points over the four-year span, demonstrating an enhanced capacity to absorb debt relative to its total capital structure.
Debt to Assets
Sherwin-Williams Co., debt to assets calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Short-term borrowings | |||||||||||||||||||||||
| Current portion of long-term debt | |||||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to assets1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||
| Linde plc | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q1 2026 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The solvency profile demonstrates a general trend toward lower leverage from early 2022 through early 2026. Total assets grew consistently throughout the period, which served as a primary driver in moderating the impact of fluctuations in total debt on the overall solvency ratio.
- Asset Expansion
- Total assets exhibited a consistent upward trajectory, increasing from 21.73 billion USD in March 2022 to 26.38 billion USD by March 2026. This sustained growth expanded the capital base, effectively diluting the impact of borrowed funds over time.
- Debt Dynamics
- Total debt levels experienced moderate volatility. After starting at 10.59 billion USD, debt reached a trough of 9.85 billion USD in December 2023. A subsequent upward trend is observed in the final quarters, with total debt rising to 11.70 billion USD by March 2026.
- Debt to Assets Ratio Trend
- The debt-to-assets ratio began at a period high of 0.49 in March 2022 and trended downward to a low of 0.42, a level maintained during several quarters between December 2024 and December 2025. While the ratio marginally increased to 0.44 by March 2026, the overall movement indicates a improved solvency position relative to the baseline established in 2022.
Debt to Assets (including Operating Lease Liability)
Sherwin-Williams Co., debt to assets (including operating lease liability) calculation (quarterly data)
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q1 2026 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= ÷ =
The solvency profile reflects a period of steady asset expansion coupled with fluctuating debt levels, resulting in a generally stable but slightly improving debt-to-assets ratio over the analyzed timeframe.
- Asset Base Expansion
- A consistent upward trajectory is evident in total assets, which grew from 21.73 billion USD in March 2022 to 26.38 billion USD by March 2026. This steady increase suggests a continuous growth in the company's resource base over the period.
- Debt Level Volatility
- Total debt, including operating lease liabilities, exhibited a cyclical pattern. Following a period of relative stability in 2022, debt peaked at 13.00 billion USD in March 2023 before declining to a low of 11.81 billion USD by December 2023. A subsequent upward trend emerged throughout 2024 and 2025, with debt levels reaching a peak of 13.79 billion USD by March 2026.
- Debt-to-Assets Ratio Trends
- The debt-to-assets ratio experienced a gradual decline from its initial high of 0.57 in early 2022. The ratio reached a floor of 0.50, a level maintained across several intervals between June 2024 and December 2025. Although the ratio returned to 0.52 by March 2026, the overall trend indicates that asset growth has generally offset the accumulation of debt, keeping the leverage ratio within a narrow and controlled range.
Financial Leverage
Sherwin-Williams Co., financial leverage calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||
| Shareholders’ equity | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Financial leverage1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||
| Linde plc | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q1 2026 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
A comprehensive analysis of the solvency data reveals a consistent deleveraging trend over the period from March 2022 to March 2026. The organization has significantly reduced its financial leverage, indicating a shift toward a more conservative capital structure and a reduction in the reliance on debt relative to equity.
- Financial Leverage Trend
- The financial leverage ratio experienced a sharp decline from its peak of 9.73 in March 2022 to 7.28 by December 2022. This downward trajectory continued throughout 2023 and 2024, reaching a period low of 5.63 in December 2025. The ratio concluded the period at 5.95 in March 2026, representing a substantial decrease in the multiplier effect of the company's assets relative to its equity base.
- Asset Growth and Expansion
- Total assets exhibited a steady upward trend, increasing from 21.73 billion USD in March 2022 to 26.38 billion USD by March 2026. This growth indicates a consistent expansion of the balance sheet, with notable accelerations occurring between December 2024 and September 2025.
- Equity Accumulation
- The reduction in financial leverage was primarily driven by a significant increase in shareholders' equity. Equity grew from 2.23 billion USD in March 2022 to 4.43 billion USD in March 2026. This nearly twofold increase in equity outpaced the growth of total assets, thereby lowering the overall solvency risk and strengthening the company's internal funding capacity.
The interaction between rising asset values and aggressively growing equity has resulted in a more stable financial position. The transition from a leverage ratio near 10.0 to a range between 5.6 and 6.0 suggests a strategic prioritization of balance sheet strengthening and a reduction in financial risk over the analyzed timeframe.
Interest Coverage
Sherwin-Williams Co., interest coverage calculation (quarterly data)
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q1 2026 Calculation
Interest coverage
= (EBITQ1 2026
+ EBITQ4 2025
+ EBITQ3 2025
+ EBITQ2 2025)
÷ (Interest expenseQ1 2026
+ Interest expenseQ4 2025
+ Interest expenseQ3 2025
+ Interest expenseQ2 2025)
= ( + + + )
÷ ( + + + )
=
The analysis of interest coverage indicates a period of strengthening solvency followed by a gradual decline in the capacity to service debt from operating profits.
- Earnings Before Interest and Tax (EBIT)
- Operating earnings exhibit significant quarterly seasonality, with peaks typically occurring in the second and third quarters. EBIT increased from 549.5 million USD in March 2022 to a peak of 1.28 billion USD in June 2024. While recent figures remain higher than the 2022 baseline, a stabilization of peak earnings is observed, with values fluctuating between 770.6 million USD and 1.17 billion USD in the final six quarters.
- Interest Expense
- Interest obligations followed a consistent upward trajectory over the analyzed period. Expenses rose from 88.4 million USD in March 2022 to a peak of 131.6 million USD by December 2025, a level maintained through March 2026. This indicates a steady increase in the cost of debt servicing.
- Interest Coverage Ratio
- The coverage ratio demonstrates a clear transition between two phases. An expansion phase occurred from March 2022 to March 2024, during which the ratio rose from 7.47 to a peak of 9.32, driven by EBIT growth that outpaced interest expense increases. A subsequent contraction phase is observed from June 2024 through March 2026, with the ratio declining to 7.83. This decline is a result of rising interest expenses coinciding with more moderate EBIT performance.
Despite the recent downward trend in the coverage ratio, the levels remain substantially above the threshold of 1.0, indicating that the organization maintains a robust margin of safety for its interest obligations.