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Charles Schwab Financial Strength

: 3 (As of Jun. 2022)
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Charles Schwab 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:

Charles Schwab Corp 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 Charles Schwab's interest coverage with the available data. Charles Schwab's debt to revenue ratio for the quarter that ended in Jun. 2022 was 1.10. Altman Z-Score does not apply to banks and insurance companies.


Charles Schwab 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:

Charles Schwab's Interest Expense for the months ended in Jun. 2022 was $-168 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 $21,112 Mil.

Charles Schwab'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. Charles Schwab Corp has enough cash to cover all of its debt. Its financial situation is stable.

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

Charles Schwab'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
=(1350 + 21112) / 20372
=1.10

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.


Charles Schwab  (NYSE:SCHW) 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.

Charles Schwab 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.


Charles Schwab Financial Strength Related Terms

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


Charles Schwab Business Description

Charles Schwab logo
Address
3000 Schwab Way, Westlake, TX, USA, 76262
Charles Schwab operates in brokerage, banking, and asset-management businesses. The company runs a large network of brick-and-mortar brokerage branch offices and a well-established online investing website. It also operates a bank and a proprietary asset management business and offers services to independent investment advisors. The company is among the largest firms in the investment business, with over $8 trillion of client assets at the end of 2021. Nearly all of its revenue is from the United States.
Executives
Wurster Richard A officer: President 3000 SCHWAB WAY WESTLAKE TX 76262
Ricketts Todd M director C/O AMERITRADE HOLDING CORP 4211 SOUTH 102ND ST OMAHA NE 68127
Levitt Brian M director C/O DOMTAR CORPORATION 234 KINGSLEY PARK DRIVE FORT MILL SC 29715
Masrani Bharat director 211 MAIN STREET SAN FRANCISCO CA 94105
Brown Marianne Catherine director 4094 TIMUQUANA ROAD JACKSONVILLE FL 33210-8571
Martin-flickinger Gerri director C/O TABLEAU SOFTWARE, INC. 1621 N 34TH ST SEATTLE WA 98103
Morgan Peter J. Iii officer: EVP and General Counsel 211 MAIN STREET SAN FRANCISCO CA 94105
Ruffel Charles A. director 3000 SCHWAB WAY WESTLAKE TX 76262
Craig Jonathan M. officer: Senior EVP 3000 SCHWAB WAY WESTLAKE TX 76262
Dea Joan director C/O PERFORMANCE SPORTS GROUP LTD. 100 DOMAIN DRIVE EXETER NH 03833-4801
Crawford Peter B. officer: EVP and CFO 211 MAIN STREET SAN FRANCISCO CA 94105
Chandoha Marie A officer: President - CSIM C/O THE CHARLES SCHWAB CORPORATION 211 MAIN STREET SAN FRANCISCO CA 94105
Murtagh Nigel J officer: EVP - Corporate Risk C/O THE CHARLES SCHWAB CORPORATION 211 MAIN STREET SAN FRANCISCO CA 94105
Haraf William S director C/O THE CHARLES SCHWAB CORPORATION 211 MAIN STREET SAN FRANCISCO CA 94105
Adams John K Jr director 300 CONTINENTAL DRIVE NEWARK DE 19713
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