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Organon Financial Strength

: 3 (As of Jun. 2022)
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Organon has the Financial Strength Rank of 3. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.

Warning Sign:

Organon & Co 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.

Organon's Interest Coverage for the quarter that ended in Jun. 2022 was 4.78. Organon's debt to revenue ratio for the quarter that ended in Jun. 2022 was 1.40. As of today, Organon's Altman Z-Score is 1.63.


Competitive Comparison

For the Drug Manufacturers - General subindustry, Organon'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.

   

Organon Financial Strength Distribution

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

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



Organon 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:

Organon's Interest Expense for the months ended in Jun. 2022 was $-98 Mil. Its Operating Income for the months ended in Jun. 2022 was $468 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2022 was $8,884 Mil.

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

Interest Coverage=-1*Operating Income (Q: Jun. 2022 )/Interest Expense (Q: Jun. 2022 )
=-1*468/-98
=4.78

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

Warning Sign:

Ben Graham prefers companies' interest coverage to be at least 5. Organon & Co interest coverage is 4.69, which is low.

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

Organon'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
=(9 + 8884) / 6340
=1.40

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.

Organon has a Z-score of 1.63, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.

Warning Sign:

Altman Z-score of 1.63 is in distress zone. This implies bankruptcy 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.


Organon  (NYSE:OGN) 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.

Organon has the Financial Strength Rank of 3. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.


Organon Financial Strength Related Terms

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


Organon Business Description

Organon logo
Traded in Other Exchanges
Address
30 Hudson Street, Floor 33, Jersey City, NJ, USA, 07302
Organon & Co is a science-based global pharmaceutical company that develops and delivers health solutions through a portfolio of prescription therapies within women's health, biosimilars, and established brands. Geographically, it derives a majority of revenue from Europe and Canada.
Executives
Whiteford Grace Puma director C/O WILLIAM SONOMA, INC. 3250 VAN NESS AVENUE SAN FRANCISCO CA 94109
Nisita Vittorio officer: Head of Global Business Svcs 2000 GALLOPING HILL ROAD KENILWORTH NJ 07033
Morrissey Joseph T. Jr. officer: Head of Manufacturing 2000 GALLOPING HILL ROAD KENILWORTH NJ 07033
Falcione Aaron officer: Chief Human Resources Officer 2000 GALLOPING HILL ROAD KENILWORTH NJ 07033
Leone Deborah R director 2000 GALLOPING HILL ROAD KENILWORTH NJ 07033
Mcgarry Martha E director 2000 GALLOPING HILL ROAD KENILWORTH NJ 07033
Ozuah Phillip director 2000 GALLOPING HILL ROAD KENILWORTH NJ 07033
Ritter Geralyn S officer: Hd of Ext. Affairs and ESG 2000 GALLOPING HILL ROAD KENILWORTH NJ 07033
Milligan Sandra officer: Head of Research & Development 2000 GALLOPING HILL ROAD KENILWORTH NJ 07033
Telman Deborah H officer: General Counsel 2000 GALLOPING HILL ROAD KENILWORTH NJ 07033
Fiedler Susanne officer: Chief Commercial Officer 2000 GALLOPING HILL ROAD KENILWORTH NJ 07033
Ezekowitz Alan director C/O FULCRUM THERAPEUTICS, INC. 26 LANDSDOWNE STREET CAMBRIDGE MA 02139
Stahler Rachel A officer: Chief Information Officer 12701 COMMONWEALTH DRIVE SUITE 9 FORT MYERS FL 33913
Essner Robert director
Dimarco Kathryn officer: Corporate Controller 30 HUDSON STREET, FLOOR 33 JERSEY CITY NJ 07302

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