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First American Financial Financial Strength

: 6 (As of Jun. 2022)
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First American Financial has the Financial Strength Rank of 6.

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.

First American Financial's Interest Coverage for the quarter that ended in Jun. 2022 was 8.42. First American Financial's debt to revenue ratio for the quarter that ended in Jun. 2022 was 0.29. Altman Z-Score does not apply to banks and insurance companies.


First American Financial 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:

First American Financial's Interest Expense for the months ended in Jun. 2022 was $-19 Mil. Its Operating Income for the months ended in Jun. 2022 was $0 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2022 was $1,930 Mil.

First American Financial's Interest Coverage for the quarter that ended in Jun. 2022 is

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

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

First American Financial'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
=(429 + 1930) / 8248
=0.29

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.

Altman Z-Score does not apply to banks and insurance companies.

* 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.


First American Financial  (NYSE:FAF) 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.

First American Financial has the Financial Strength Rank of 6.


First American Financial Financial Strength Related Terms

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


First American Financial Business Description

First American Financial logo
Traded in Other Exchanges
Address
1 First American Way, Santa Ana, CA, USA, 92707-5913
First American Financial Corp is a financial services business providing insurance through two segments: title insurance and related services and specialty insurance. Title insurance and related services include real estate insurance, property closing services, third-party handling of real estate funds (escrow), risk mitigation, real estate data products, and related real estate transaction services. The title insurance sector serves residential and commercial deals. Specialty insurance includes property insurance policies, casualty insurance policies, and home warranties. Nearly all the company's revenue comes from the title insurance and related services segment in the United States.
Executives
Spence Marsha A director 1 FIRST AMERICAN WAY SANTA ANA CA 92707
Cornehl Lisa W officer: SVP, Chief Legal Officer 1 FIRST AMERICAN WAY SANTA ANA CA 92886
Latorre Jean C director 1 FIRST AMERICAN WAY SANTA ANA CA 92707
Adams Steven A officer: VP & Chief Accounting Officer 2260 E IMPERIAL HIGHWAY EL SEGUNDO X1 90245
Wyrsch Martha B director
Gilyard Reginald Harold director 1 FIRST AMERICAN WAY SANTA ANA CA 92707
Mccarthy Margaret M director AETNA INC. 151 FARMINGTON AVENUE HARTFORD CT 06156
Oman Mark C director ONE HOME CAMPUS X2401-06X DES MOINES IA 50328
Wajner Matthew F. officer: Chief Accounting Officer 1 FIRST AMERICAN WAY SANTA ANA CA 92707
Anderson Anthony director 1100 N. WOOD DALE ROAD WOOD DALE IL 60191
Leavell Christopher Michael officer: COO of Subsidiary 1 FIRST AMERICAN WAY SANTA ANA CA 92707
Doti James L director
Mckee Michael D director
Mckernan Thomas V Jr director
Seaton Mark Edward officer: Senior Vice President 1 FIRST AMERICAN WAY SANTA ANA CA 92707
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