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Zimmer Biomet Holdings has the Financial Strength Rank of 6.
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.Zimmer Biomet Holdings's Interest Coverage for the quarter that ended in Dec. 2023 was 8.37. Zimmer Biomet Holdings's debt to revenue ratio for the quarter that ended in Dec. 2023 was 0.76. As of today, Zimmer Biomet Holdings's Altman Z-Score is 2.95.
For the Medical Devices subindustry, Zimmer Biomet Holdings'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.
For the Medical Devices & Instruments industry and Healthcare sector, Zimmer Biomet Holdings's Financial Strength distribution charts can be found below:
* The bar in red indicates where Zimmer Biomet Holdings's Financial Strength falls into.
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:
Zimmer Biomet Holdings's Interest Expense for the months ended in Dec. 2023 was $-50 Mil. Its Operating Income for the months ended in Dec. 2023 was $421 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Dec. 2023 was $5,013 Mil.
Zimmer Biomet Holdings's Interest Coverage for the quarter that ended in Dec. 2023 is
Interest Coverage | = | -1 | * | Operating Income (Q: Dec. 2023 ) | / | Interest Expense (Q: Dec. 2023 ) |
= | -1 | * | 420.8 | / | -50.3 | |
= | 8.37 |
The higher the ratio, the stronger the company's financial strength is.
2. Debt to revenue ratio. The lower, the better.
Zimmer Biomet Holdings's Debt to Revenue Ratio for the quarter that ended in Dec. 2023 is
Debt to Revenue Ratio | = | Total Debt (Q: Dec. 2023 ) | / | Revenue | ||
= | (Short-Term Debt & Capital Lease Obligation | + | Long-Term Debt & Capital Lease Obligation) | / | Revenue | |
= | (900 | + | 5012.6) | / | 7760.4 | |
= | 0.76 |
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.
Zimmer Biomet Holdings has a Z-score of 2.95, indicating it is in Grey Zones. This implies that Zimmer Biomet Holdings is in some kind of financial stress. If it is below 1.81, the company may faces bankrupcy risk.
Warning Sign:
Altman Z-score of 2.95 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.
* 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.
Zimmer Biomet Holdings (NYSE:ZBH) 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.
Zimmer Biomet Holdings has the Financial Strength Rank of 6.
Thank you for viewing the detailed overview of Zimmer Biomet Holdings's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.
Syed A. Jafry | director | 345 E. MAIN STREET, WARSAW IN 46580 |
Sreelakshmi Kolli | director | C/O ALIGN TECHNOLOGY INC., 2820 ORCHARD PARKWAY, SAN JOSE CA 94131 |
Christopher B Begley | director | |
Robert Hagemann | director | 3 GIRALDA FARMS, MADISON NJ 07940 |
Michael W Michelson | director | 2800 SAND HILL ROAD, SUITE 200, MENLO PARK CA 94025 |
Betsy J Bernard | director | 711 HIGH STREET, DES MOINES IA 50392-0300 |
Arthur J Higgins | director | C/O ZIMMER, INC., P.O. BOX 708, WARSAW IN 46580 |
Chad F Phipps | officer: Assoc. Gen. Counsel, Corp. Sec | C/O ZIMMER, INC., P.O. BOX 708, WARSAW IN 46580 |
Zuilen Wilfred Van | officer: Pres, Europe, M. East & Africa | 345 E. MAIN STREET, WARSAW IN 46580 |
Paul A Stellato | officer: VP, Controller & CAO | C/O XYLEM INC, 1 INTERNATIONAL DRIVE, RYE BROOK NY 10573 |
Sang Yi | officer: President, Asia Pacific | 345 E. MAIN STREET, WARSAW IN 46580 |
Lori Winkler | officer: SVP and CHRO | 345 E. MAIN STREET, WARSAW IN 46580 |
Rachel Ellingson | officer: SVP & CSO | 345 E MAIN STREET, WARSAW K7 46580 |
Bryan C Hanson | director, officer: President and CEO | ZIMMER BIOMET HOLDINGS, 345 E. MAIN STREET, WARSAW IN 46580 |
Aure Bruneau | officer: Group President | 345 E. MAIN STREET, WARSAW IN 46580 |
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