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Bank of America Corporation  (NYSE:BAC) Financial Strength: 5 (As of Jun. 2017)

Bank of America Corporation has the Financial Strength Rank of 5.

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 (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. .

Bank of America Corporation's for the quarter that ended in Jun. 2017 was 2.65. Bank of America Corporation's debt to revenue ratio for the quarter that ended in Jun. 2017 was 11.41. does not apply to banks and insurance companies.

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 (current year). The higher, the better.

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

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:

Bank of America Corporation's for the months ended in Jun. 2017 was \$-3,160 Mil. Its for the months ended in Jun. 2017 was \$8,377 Mil. And its for the quarter that ended in Jun. 2017 was \$223,923 Mil.

Bank of America Corporation's for the quarter that ended in Jun. 2017 is

 Interest Coverage = -1 * (Q: Jun. 2017 ) / (Q: Jun. 2017 ) = -1 * 8377 / -3160 = 2.65

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

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

Bank of America Corporation's Debt to Revenue Ratio for the quarter that ended in Jun. 2017 is

 Debt to Revenue Ratio = Total Debt (Q: Jun. 2017 ) / (Q: Jun. 2017 ) = ( + ) / = (36494 + 223923) / 22829 = 11.41

3. .

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.

does not apply to banks and insurance companies.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

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.

Bank of America Corporation has the Financial Strength Rank of 5.

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