GURUFOCUS.COM » STOCK LIST » USA » NYSE » NatWest Group PLC (NYSE:NWG) » Definitions » Financial Strength
Switch to:

NatWest Group Financial Strength

: 4 (As of Jun. 2022)
View and export this data going back to 2007. Start your Free Trial

NatWest Group has the Financial Strength Rank of 4.

Warning Sign:

NatWest Group PLC 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.

GuruFocus does not calculate NatWest Group's interest coverage with the available data. NatWest Group's debt to revenue ratio for the quarter that ended in Jun. 2022 was 4.37. Altman Z-Score does not apply to banks and insurance companies.


NatWest Group 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:

NatWest Group's Interest Expense for the months ended in Jun. 2022 was $-632 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 $69,583 Mil.

NatWest Group's Interest Coverage for the quarter that ended in Jun. 2022 is

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

Good Sign:

Ben Graham prefers companies' interest coverage to be at least 5. NatWest Group PLC has enough cash to cover all of its debt. Its financial situation is stable.

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

NatWest Group'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
=(0 + 69582.512315271) / 15940.886699507
=4.37

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.


NatWest Group  (NYSE:NWG) 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.

NatWest Group has the Financial Strength Rank of 4.


NatWest Group Financial Strength Related Terms

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


NatWest Group Business Description

NatWest Group logo
Address
Gogarburn, P.O. Box 1000, Edinburgh, GBR, EH12 1HQ
NatWest Group is a universal bank headquartered in the United Kingdom, where it derives around 90% of its total income. The bank operates a retail, commercial, and private bank in the U.K., offering clients lending and payment services as well as asset management services. The three segments combined consume about 65% of the group's risk-weighted assets. It also provides financing, risk management, and trading solutions around the world to global financial institutions and large corporates in its NatWest markets segment.
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)