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Canadian National Railway Co Financial Strength

: 5 (As of Jun. 2022)
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Canadian National Railway Co 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.

Canadian National Railway Co's Interest Coverage for the quarter that ended in Jun. 2022 was 15.03. Canadian National Railway Co's debt to revenue ratio for the quarter that ended in Jun. 2022 was 0.85. As of today, Canadian National Railway Co's Altman Z-Score is 3.75.


Competitive Comparison

For the Railroads subindustry, Canadian National Railway 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.

   

Canadian National Railway Co Financial Strength Distribution

For the Transportation industry and Industrials sector, Canadian National Railway Co's Financial Strength distribution charts can be found below:

* The bar in red indicates where Canadian National Railway Co's Financial Strength falls into.



Canadian National Railway Co 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:

Canadian National Railway Co's Interest Expense for the months ended in Jun. 2022 was $-100 Mil. Its Operating Income for the months ended in Jun. 2022 was $1,503 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2022 was $9,557 Mil.

Canadian National Railway Co's Interest Coverage for the quarter that ended in Jun. 2022 is

Interest Coverage=-1*Operating Income (Q: Jun. 2022 )/Interest Expense (Q: Jun. 2022 )
=-1*1502.6554201812/-99.968759762574
=15.03

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

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

Canadian National Railway Co's Debt to Revenue Ratio for the quarter that ended in Jun. 2022 is

Debt to Revenue Ratio=Total Debt (Q: Jun. 2022 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(1911.1215245236 + 9557.1696344892) / 13570.759137769
=0.85

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.

Canadian National Railway Co has a Z-score of 3.75, indicating it is in Safe Zones. This implies the Z-Score is strong.

Good Sign:

Altman Z-score of 3.75 is strong.

* 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.


Canadian National Railway Co  (NYSE:CNI) 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.

Canadian National Railway Co has the Financial Strength Rank of 5.


Canadian National Railway Co Financial Strength Related Terms

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


Canadian National Railway Co Business Description

Canadian National Railway Co logo
Address
935 de La Gauchetiere Street West, Montreal, QC, CAN, H3B 2M9
Canadian National's railway spans Canada from coast to coast and extends through Chicago to the Gulf of Mexico. In 2019, CN delivered almost 6 million carloads over its 19,600 miles of track. CN generated roughly CAD 14 billion in total revenue by hauling intermodal containers (25% of consolidated revenue), petroleum and chemicals (21%), grain and fertilizers (16%), forest products (12%), metals and mining (11%), automotive shipments (6%), and coal (4%). Other items constitute the remaining revenue.

Canadian National Railway Co Headlines

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