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Cenovus Energy Financial Strength

: 3 (As of Mar. 2021)
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Cenovus Energy 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:

Cenovus Energy Inc 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.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

Cenovus Energy's Interest Coverage for the quarter that ended in Mar. 2021 was 3.94. Cenovus Energy's debt to revenue ratio for the quarter that ended in Mar. 2021 was 1.83. As of today, Cenovus Energy's Altman Z-Score is 0.81.


Competitive Comparison
* 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.


Cenovus Energy Financial Strength Distribution

* The bar in red indicates where Cenovus Energy's Financial Strength falls into.



Cenovus Energy 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:

Cenovus Energy's Interest Expense for the months ended in Mar. 2021 was $-186 Mil. Its Operating Income for the months ended in Mar. 2021 was $734 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Mar. 2021 was $13,392 Mil.

Cenovus Energy's Interest Coverage for the quarter that ended in Mar. 2021 is

Interest Coverage=-1*Operating Income (Q: Mar. 2021 )/Interest Expense (Q: Mar. 2021 )
=-1*734.34640782879/-186.17232874533
=3.94

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

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

Cenovus Energy's Debt to Revenue Ratio for the quarter that ended in Mar. 2021 is

Debt to Revenue Ratio=Total Debt (Q: Mar. 2021 ) / Revenue (Q: Mar. 2021 )
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(439.97135810327 + 13391.677937783) / 7576.5772933408
=1.83

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.

Cenovus Energy has a Z-score of 0.81, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.

Warning Sign:

Altman Z-score of 0.81 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.


Cenovus Energy  (NYSE:CVE) 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.

Cenovus Energy 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.


Cenovus Energy Financial Strength Related Terms


Cenovus Energy Financial Strength Headlines

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