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STEP Energy Services (TSX:STEP) Financial Strength : 5 (As of Dec. 2023)


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What is STEP Energy Services Financial Strength?

STEP Energy Services 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.

STEP Energy Services did not have earnings to cover the interest expense. STEP Energy Services's debt to revenue ratio for the quarter that ended in Dec. 2023 was 0.15. As of today, STEP Energy Services's Altman Z-Score is 2.42.


Competitive Comparison of STEP Energy Services's Financial Strength

For the Oil & Gas Equipment & Services subindustry, STEP Energy Services'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.


STEP Energy Services's Financial Strength Distribution in the Oil & Gas Industry

For the Oil & Gas industry and Energy sector, STEP Energy Services's Financial Strength distribution charts can be found below:

* The bar in red indicates where STEP Energy Services's Financial Strength falls into.



STEP Energy Services 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:

STEP Energy Services's Interest Expense for the months ended in Dec. 2023 was C$-2.3 Mil. Its Operating Income for the months ended in Dec. 2023 was C$-4.4 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Dec. 2023 was C$104.9 Mil.

STEP Energy Services's Interest Coverage for the quarter that ended in Dec. 2023 is

STEP Energy Services did not have earnings to cover the interest expense.

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

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

STEP Energy Services's Debt to Revenue Ratio for the quarter that ended in Dec. 2023 is

Debt to Revenue Ratio=Total Debt (Q: Dec. 2023 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(8.753 + 104.88) / 780.188
=0.15

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.

STEP Energy Services has a Z-score of 2.42, indicating it is in Grey Zones. This implies that STEP Energy Services 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 2.42 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.


STEP Energy Services  (TSX:STEP) 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.

STEP Energy Services has the Financial Strength Rank of 5.


STEP Energy Services Financial Strength Related Terms

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


STEP Energy Services (TSX:STEP) Business Description

Traded in Other Exchanges
Address
1200, 205-5th Avenue SW, Bow Valley Square II, Calgary, AB, CAN, T2P 2V7
STEP Energy Services Ltd is an oilfield service company. It provides coiled tubing, fluid and nitrogen pumping, and hydraulic fracturing solutions. STEP has a high-performance safety-focused culture and provides innovative, reliable, and cost-effective solutions to its E&P clients. The group's services are focused on the WCSB, Permian and Eagle Ford in Texas, the Uinta-Piceance and Niobrara-DJ basins in Colorado, and the Bakken in North Dakota.