General Mills Financial Strength

General Mills 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:

General Mills's Interest Expense for the months ended in Feb. 2021 was $-106 Mil. Its Operating Income for the months ended in Feb. 2021 was $838 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Feb. 2021 was $9,767 Mil.

General Mills's Interest Coverage for the quarter that ended in Feb. 2021 is

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

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

General Mills's Debt to Revenue Ratio for the quarter that ended in Feb. 2021 is

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.

General Mills has a Z-score of 2.50, indicating it is in Grey Zones. This implies that General Mills is in some kind of financial stress. If it is below 1.81, the company may faces bankrupcy risk.

Warning Sign:

Altman Z-score of 2.5 is in grey area. The implies that the company is in some kind of financial stress. If it is below 1.8, the company may faces bankrupcy risk.

* 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.

General Mills  (NYSE:GIS) Financial Strength Explanation