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Meritor Financial Strength

: 5 (As of Mar. 2022)
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Meritor 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.

Meritor's Interest Coverage for the quarter that ended in Mar. 2022 was 5.50. Meritor's debt to revenue ratio for the quarter that ended in Mar. 2022 was 0.25. As of today, Meritor's Altman Z-Score is 2.76.


Competitive Comparison

For the Auto Parts subindustry, Meritor'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.

   

Meritor Financial Strength Distribution

For the Vehicles & Parts industry and Consumer Cyclical sector, Meritor's Financial Strength distribution charts can be found below:

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



Meritor 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:

Meritor's Interest Expense for the months ended in Mar. 2022 was $-12 Mil. Its Operating Income for the months ended in Mar. 2022 was $66 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Mar. 2022 was $1,025 Mil.

Meritor'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*66/-12
=5.50

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

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

Meritor'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
=(114 + 1025) / 4616
=0.25

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.

Meritor has a Z-score of 2.76, indicating it is in Grey Zones. This implies that Meritor 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 2.76 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy 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.


Meritor  (NYSE:MTOR) 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.

Meritor has the Financial Strength Rank of 5.


Meritor Financial Strength Related Terms

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


Meritor Business Description

Meritor logo
Traded in Other Exchanges
Address
2135 West Maple Road, Troy, MI, USA, 48084-7186
Meritor Inc is a manufacturer of automobile parts for commercial vehicles and industrial markets. The company offers drivetrain, axle, brake, and suspension solutions for commercial trucks, trailers, buses, coaches, off-highway machinery, and defence contractors. The company serves original equipment markets as well as the aftermarket segment for the transportation and industrial sectors. Meritor generates the majority of its revenue from its commercial truck and industrial segment. Geographically, sales are focused on North American markets.
Executives
Fessenden Elizabeth Anne director 1137 WEST AVENUE RICHMOND VA 23220
Nelligan John officer: SVP & Pres., Truck, Americas 2490 PEBBLE BEACH DRIVE OAKLAND MI 48363
Hogan Ken officer: SVP & Pres. Truck, EUR & APAC 8250 LINCOLN DR HUNTINGTON WOODS MI 48070
Bowes Timothy Earl Joseph officer: SVP & Pres. Ind & NA Aftmkt 2135 WEST MAPLE ROAD TROY MI 48084
Merchant Fazal F director 2230 E. IMPERIAL HIGHWAY EL SEGUNDO CA 90245
Lim Hannah S. officer: SVP, CLO & Corp Sec 2135 WEST MAPLE ROAD TROY MI 48084
Beringhause Steven director 529 PLEASANT STREET MAIL STATION B-43 ATTLEBORO MA 02703
Robbins Larry 10 percent owner 767 FIFTH AVENUE 44TH FLOOR NEW YORK NY 10153
Glenview Capital Management, Llc 10 percent owner 767 FIFTH AVENUE 44TH FLOOR NEW YORK NY 10153
Anderson Carl Douglas Ii officer: SVP and CFO 819 MAJESTIC DRIVE ROCHESTER HILLS MI 48306
Boehm Rodger L director 165 WESTVIEW ROAD WINNETKA IL 60093
Parry David C director 155 HARLEM AVE. GLENVIEW IL 60025
Pajonas Thomas L director MERITOR, INC. 2135 WEST MAPLE ROAD TROY MI 48084-7186
Brooks Rhonda L director MERITOR, INC. 2135 WEST MAPLE ROAD TROY MI 48084-7186
Newlin William R director NEWLIN INVESTMENT COMPANY LLC 428 BEAVER STREET - 2ND FLOOR SEWICKLEY PA 15143

Meritor Headlines

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