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GURUFOCUS.COM > STOCK LIST > Healthcare > Drug Manufacturers > Elanco Animal Health Inc (NYSE:ELAN) > Definitions > Financial Strength
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Elanco Animal Health Financial Strength

: 4 (As of Mar. 2022)
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Elanco Animal Health has the Financial Strength Rank of 4.

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.

Elanco Animal Health's Interest Coverage for the quarter that ended in Mar. 2022 was 3.42. Elanco Animal Health's debt to revenue ratio for the quarter that ended in Mar. 2022 was 1.25. As of today, Elanco Animal Health's Altman Z-Score is 0.99.


Competitive Comparison

For the Drug Manufacturers - Specialty & Generic subindustry, Elanco Animal 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.

   

Elanco Animal Health Financial Strength Distribution

For the Drug Manufacturers industry and Healthcare sector, Elanco Animal Health's Financial Strength distribution charts can be found below:

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



Elanco Animal 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:

Elanco Animal Health's Interest Expense for the months ended in Mar. 2022 was $-52 Mil. Its Operating Income for the months ended in Mar. 2022 was $178 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Mar. 2022 was $6,073 Mil.

Elanco Animal Health's Interest Coverage for the quarter that ended in Mar. 2022 is

Interest Coverage=-1*Operating Income (Q: Mar. 2022 )/Interest Expense (Q: Mar. 2022 )
=-1*178/-52
=3.42

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

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

Elanco Animal Health's Debt to Revenue Ratio for the quarter that ended in Mar. 2022 is

Debt to Revenue Ratio=Total Debt (Q: Mar. 2022 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(61 + 6073) / 4900
=1.25

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.

Elanco Animal Health has a Z-score of 0.99, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.

Warning Sign:

Altman Z-score of 0.99 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.


Elanco Animal Health  (NYSE:ELAN) 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.

Elanco Animal Health has the Financial Strength Rank of 4.


Elanco Animal Health Financial Strength Related Terms

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


Elanco Animal Health Business Description

Elanco Animal Health logo
Industry
Healthcare » Drug Manufacturers NAICS : 325412 SIC : 2834
Traded in Other Exchanges
Address
2500 Innovation Way, Greenfield, IN, USA, 46140
Elanco Animal Health Inc is an animal health company that is engaged in innovating, developing, manufacturing, and marketing products for companion and food animals. Geographically, the company's operations are conducted globally and sell its products in over 90 countries. It offers a range of food animal products used in cattle, sheep, goats, and swine production.
Executives
Meer James M officer: Chief Accounting Officer C/O ELANCO ANIMAL HEALTH, INC. 2500 INNOVATION WAY GREENFIELD IN 46140
Ehle Dirk officer: Ex VP & Pres Elanco Europe C/O ELANCO ANIMAL HEALTH INCORPORATED 2500 INNOVATION WAY GREENFIELD IN 46140
Lee Joyce J. officer: Ex VP Prs US Pet Hlth Com Op C/O ZOETIS INC. 100 CAMPUS DRIVE FLORHAM PARK NJ 07940
Urbanek David Alan officer: See Remarks 2500 INNOVATION WAY GREENFIELD IN 46140
Schacht Aaron L officer: See Remarks 3750 BIRKDALE DR CARMEL IN 46033
Hoover R David director, See Remarks C/O EDGEWELL PERSONAL CARE COMPANY 1350 TIMBERLAKE MANOR PARKWAY CHESTERFIELD MO 63017
Bilbrey John P director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: BILBREY JOHN P a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Garcia Art A director 11690 N.W. 105TH STREET MIAMI FL 33178
Young Todd S. officer: See Remarks C/O ACADIA PHARMACEUTICALS INC. 3611 VALLEY CENTRE DRIVE, SUITE 300 SAN DIEGO CA 92130
Bayer Aktiengesellschaft 10 percent owner BAYERWERK, GEBAEUDE W11 KAISER-WILHELM-ALLEE LEVERKUSEN 2M D-51368
Bayer World Investments B.v. 10 percent owner ENERGIEWEG 1 MIJDRECHT P7 3641
Mason Racquel Harris officer: See Remarks C/O ELANCO ANIMAL HEALTH INCORPORATED 2500 INNOVATION WAY GREENFIELD IN 46140
Correia De Simas Jose Manuel officer: See Remarks C/O ELANCO ANIMAL HEALTH INCORPORATED 2500 INNOVATION WAY GREENFIELD IN 46140
Harrington Michael J director LILLY CORPORATE CENTER INDIANAPOLIS IN 46285
Anand Kapila K director C/O EXTENDED STAY AMERICA, INC. 11525 N. COMMUNITY HOUSE ROAD, SUITE 100 CHARLOTTE NC 28277

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