The Wendy's Co 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:
The Wendy's Co 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 rated on a scale of 1 to 10 and 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.
4. Other debt related ratios.
A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
The Wendy's Co's Interest Coverage for the quarter that ended in Mar. 2025 was 2.54.
The Wendy's Co's debt to revenue ratio for the quarter that ended in Mar. 2025 was 1.95.
As of today, The Wendy's Co's Altman Z-Score is 1.13.
Competitive Comparison of The Wendy's Co's Financial Strength
For the Restaurants subindustry, The Wendy's Co'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.
The Wendy's Co's Financial Strength Distribution in the Restaurants Industry
For the Restaurants industry and Consumer Cyclical sector, The Wendy's Co's Financial Strength distribution charts can be found below:
* The bar in red indicates where The Wendy's Co's Financial Strength falls into.
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:
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.
The Wendy's Co has a Z-score of 1.13, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.
Warning Sign:
Altman Z-score of 1.13 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.
The Wendy's Co (NAS:WEN) Financial Strength Explanation
The rank is rated on a scale of 1 to 10. A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
The Wendy's Co 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.
The Wendy's Co Financial Strength Related Terms
Thank you for viewing the detailed overview of The Wendy's Co's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.
The Wendy's Company is the second-largest burger quick-service restaurant, or QSR, chain in the United States by systemwide sales, with $12.6 billion in 2024, narrowly edging Burger King ($11.5 billion) and clocking in well behind wide-moat McDonald's ($51.1 billion). After divestitures of Tim Hortons (2006) and Arby's (2011), the firm manages just the burger banner, generating sales across a footprint that spanned more than 7,200 total stores in 30 countries as of year-end 2024. Wendy's generates revenue from the sale of hamburgers, chicken sandwiches, salads, and fries throughout its company-owned footprint, through franchise royalty and marketing fund payments remitted by its franchisees, which account for roughly 94% of stores, and through franchise flipping and advisory fees.
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