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Encompass Health (NYSE:EHC) Financial Strength

: 5 (As of Dec. 2023)
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Encompass Health 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 Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

Encompass Health's Interest Coverage for the quarter that ended in Dec. 2023 was 5.44. Encompass Health's debt to revenue ratio for the quarter that ended in Dec. 2023 was 0.59. As of today, Encompass Health's Altman Z-Score is 2.41.


Competitive Comparison

For the Medical Care Facilities subindustry, Encompass Health'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.


Encompass Health Financial Strength Distribution

For the Healthcare Providers & Services industry and Healthcare sector, Encompass Health's Financial Strength distribution charts can be found below:

* The bar in red indicates where Encompass Health's Financial Strength falls into.



Encompass Health 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:

Encompass Health's Interest Expense for the months ended in Dec. 2023 was $-35 Mil. Its Operating Income for the months ended in Dec. 2023 was $190 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Dec. 2023 was $2,884 Mil.

Encompass Health'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*189.9/-34.9
=5.44

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

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

Encompass Health'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
=(48.9 + 2883.9) / 4987.2
=0.59

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.

Encompass Health has a Z-score of 2.41, indicating it is in Grey Zones. This implies that Encompass Health 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 2.41 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.


Encompass Health  (NYSE:EHC) 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.

Encompass Health has the Financial Strength Rank of 5.


Encompass Health Financial Strength Related Terms

Thank you for viewing the detailed overview of Encompass Health's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.


Encompass Health (NYSE:EHC) Business Description

Traded in Other Exchanges
Address
9001 Liberty Parkway, Birmingham, AL, USA, 35242
Encompass Health Corp provides post-acute healthcare services in the United States through a network of inpatient rehabilitation hospitals. Inpatient rehabilitation contributes the majority of the firm's revenue and provides specialized rehabilitative treatment through a network of inpatient hospitals. These hospitals are concentrated in the eastern half of the United States and Texas.
Executives
Douglas E Coltharp officer: EVP, Chief Financial Officer C/O UNDER ARMOUR, INC., 1020 HULL STREET, BALTIMORE MD 21230
Elissa Joy Charbonneau officer: Chief Medical Officer 24 HAWTHORNE CIRCLE, YARMOUTH ME 04096
Mark J Tarr officer: Executive VP Operations C/O ENCOMPASS HEALTH CORPORATION, 9001 LIBERTY PARKWAY, BIRMINGHAM AL 35242
Greg D Carmichael director
Kevin J. O'connor director 13995 PASTEUR BOULEVARD, PALM BEACH GARDENS FL 33418
Terrance Williams director 7184 BIDDICK, NEW ALBANY OH 43054
Christopher R Reidy director ONE ADP BLVD, ROSELAND NJ 07068
Andrew L Price officer: Interim Chief Accting Officer 3660 GRANDVIEW PARKWAY, SUITE 200, BIRMINGHAM AL 35243
Barbara Ann Jacobsmeyer officer: EVP, Operations 2122 ACTON PARK WAY, BIRMINGHAM AL 35243
Donald L Correll director C/O INTERCHANGE FINANCIAL SERVICES CORP, PARK 80 W PLAZA TWO, SADDLE BROOK NJ 07663
Anthony April Kaye Bullock officer: CEO and President, Encompass 3606 PRINCETON AVENUE, DALLAS TX 75205
Higdon Leo I Jr director 1700 LINCOLN STREET, 28TH FLOOR, DENVER CO 80203
Patricia Anne Maryland director 7342 HORIZON DRIVE, WEST PALM BEACH FL 33412
Yvonne M Curl director C/O ENHABIT, INC., 6688 N. CENTRAL EXPRESSWAY, SUITE 1300, DALLAS TX 75206
Cheryl B. Levy officer: Chief Human Resources Officer 3137 BROOK HIGHLAND DRIVE, BIRMINGHAM AL 35242