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MTS Systems has the Financial Strength Rank of 0.
Warning Sign:
MTS Systems 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.MTS Systems's Interest Coverage for the quarter that ended in Dec. 2020 was 0.55. MTS Systems's debt to revenue ratio for the quarter that ended in Dec. 2020 was 0.73. As of today, MTS Systems's Altman Z-Score is 1.02.
For the Scientific & Technical Instruments subindustry, MTS Systems'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 Hardware industry and Technology sector, MTS Systems's Financial Strength distribution charts can be found below:
* The bar in red indicates where MTS Systems'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:
MTS Systems's Interest Expense for the months ended in Dec. 2020 was $-8.5 Mil. Its Operating Income for the months ended in Dec. 2020 was $4.6 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Dec. 2020 was $541.2 Mil.
MTS Systems's Interest Coverage for the quarter that ended in Dec. 2020 is
Interest Coverage | = | -1 | * | Operating Income (Q: Dec. 2020 ) | / | Interest Expense (Q: Dec. 2020 ) |
= | -1 | * | 4.631 | / | -8.467 | |
= | 0.55 |
The higher the ratio, the stronger the company's financial strength is.
Warning Sign:
Ben Graham prefers companies interest coverage is at least 5. MTS Systems Corps earnings cannot cover its interest expense. If the situation continues, the company may have to issue more debt.
2. Debt to revenue ratio. The lower, the better.
MTS Systems's Debt to Revenue Ratio for the quarter that ended in Dec. 2020 is
Debt to Revenue Ratio | = | Total Debt (Q: Dec. 2020 ) | / | Revenue | ||
= | (Short-Term Debt & Capital Lease Obligation | + | Long-Term Debt & Capital Lease Obligation) | / | Revenue | |
= | (35.857 | + | 541.228) | / | 795.216 | |
= | 0.73 |
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.
MTS Systems has a Z-score of 1.02, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.
Warning Sign:
Altman Z-score of 1.02 is in distress zone. This implies bankrupcy 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.
MTS Systems (NAS:MTSC) 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.
MTS Systems has the Financial Strength Rank of 0.
Thank you for viewing the detailed overview of MTS Systems's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.
Randy J Martinez | director, Interim CEO | HLH BUILDING, 101 WORLD DRIVE, PEACHTREE CITY GA 30269 |
Todd Klemmensen | officer: SVP, GC and Corp. Sec. | 14000 TECHNOLOGY DRIVE EDEN PRAIRIE MN 55344-2290 |
Steven B Harrison | officer: EVP & Pres. Test & Simulation | 14000 TECHNOLOGY DRIVE EDEN PRAIRIE MN 55344 |
Brian T Ross | officer: EVP & CFO | 14000 TECHNOLOGY DRIVE EDEN PRAIRIE MN 55344 |
Jeffrey A Graves | director, officer: President and CEO | C/O C&D TECHNOLOGIES, INC., 1400 UNION MEETING RD, BLUE BELL PA 19422 |
David Hore | officer: EVP & Pres. Sensors | 14000 TECHNOLOGY DRIVE EDEN PRAIRIE MN 55344 |
David J Anderson | director | 402 FARRINGTON DRIVE, LINCOLNSHIRE IL 60069 |
Linda Zukauckas | director | 200 VESEY STREET, NEW YORK NY 10285 |
Chun Hung Yu | director | 14000 TECHNOLOGY DR EDEN PRAIRIE MN 55344 |
David D Johnson | director | C/O MOLEX, INCORPORATED, 2222 WELLINGTON COURT, LISLE IL 60532 |
Nancy A. Altobello | director | 520 MADISON AVENUE, NEW YORK NY 10022 |
Michael V Schrock | director | 5500 WAYZATA BLVD., SUITE 800, GOLDEN VALLEY MN 55416 |
William C Becker | officer: SVP Test & Simulation Comm Ops | 14000 TECHNOLOGY DRIVE EDEN PRAIRIE MN 55344 |
Gail P Steinel | director | 909 ROSE AVENUE - SUITE 200, NORTH BETHESDA MD 20852 |
Maximiliane C Straub | director | 14000 TECHNOLOGY DRIVE, EDEN PRAIRIE MN 55344 |
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