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Burcon NutraScience (TSX:BU) Financial Strength : 3 (As of Jun. 2023)


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What is Burcon NutraScience Financial Strength?

Burcon NutraScience has the Financial Strength Rank of 3. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.

Warning Sign:

Burcon NutraScience Corp displays poor financial strength. Usually, this is caused by too much debt for the company.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

Burcon NutraScience did not have earnings to cover the interest expense. As of today, Burcon NutraScience's Altman Z-Score is -18.35.


Competitive Comparison of Burcon NutraScience's Financial Strength

For the Packaged Foods subindustry, Burcon NutraScience's Financial Strength, along with its competitors' market caps and Financial Strength data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Burcon NutraScience's Financial Strength Distribution in the Consumer Packaged Goods Industry

For the Consumer Packaged Goods industry and Consumer Defensive sector, Burcon NutraScience's Financial Strength distribution charts can be found below:

* The bar in red indicates where Burcon NutraScience's Financial Strength falls into.



Burcon NutraScience Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

Burcon NutraScience's Interest Expense for the months ended in Jun. 2023 was C$-0.13 Mil. Its Operating Income for the months ended in Jun. 2023 was C$-1.77 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2023 was C$5.23 Mil.

Burcon NutraScience's Interest Coverage for the quarter that ended in Jun. 2023 is

Burcon NutraScience did not have earnings to cover the interest expense.

The higher the ratio, the stronger the company's financial strength is.

2. Debt to revenue ratio. The lower, the better.

Burcon NutraScience's Debt to Revenue Ratio for the quarter that ended in Jun. 2023 is

Debt to Revenue Ratio=Total Debt (Q: Jun. 2023 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(0.048 + 5.232) / 0
=N/A

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

Burcon NutraScience has a Z-score of -18.35, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.

Warning Sign:

Altman Z-score of -18.35 is in distress zone. This implies bankruptcy possibility in the next two years.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Burcon NutraScience  (TSX:BU) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

Burcon NutraScience has the Financial Strength Rank of 3. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.


Burcon NutraScience Financial Strength Related Terms

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Burcon NutraScience (TSX:BU) Business Description

Traded in Other Exchanges
Address
1946 West Broadway, Vancouver, BC, CAN, V6J 1Z2
Burcon NutraScience Corp is a technology company in the development of plant-based proteins. With over 290 issued patent applications, that have been developed, Burcon has grown a portfolio of composition, application, and process patents covering novel plant-based proteins derived from pea, canola, soy, hemp, sunflower seed, and more. Its joint venture Merit Foods is building a protein production facility in Manitoba, Canada, where it will produce, under license, Burcon's novel pea and canola protein ingredients.
Executives
John Vassallo Director

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