Companhia Siderúrgica Nacional — financial distress indicators
Financial-health summary
Companhia Siderúrgica Nacional's reported numbers place it in the 'Weak' financial-health band (distress score 62/100). The main indicators are operating profit does not cover interest, market-implied default probability >20% and losses in each of the last 3 years. Independently, the Ohlson accounting model puts its 1-year failure probability at 52% and the market-implied (Merton) default probability is 75.9%.
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Interest coverage (EBIT / interest) is 0.91×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
Merton distance-to-default -0.70 σ → PD 76%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Total debt is 7.6× EBITDA.
Debt above ~6× EBITDA is deep sub-investment-grade territory; refinancing becomes difficult when rates or earnings move against the company.
O-score 0.10 → model probability 52%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- No material mitigating factors found in the available data.
📰 Recent news scan
- SID Q2 Earnings Miss on Higher Financial Costs, Revenues Rise Y/YYahoo Finance · 2026-08-17
- Companhia Siderurgica Nacional (SID) (Q2 2026) Earnings Call Highlights: Steel Recovery and ...Yahoo Finance · 2026-08-15
- Announcement of Final Results of Private Exchange Offer for CSN Inova Ventures’ Outstanding 6.750% Senior Notes due 2028 and Consent SolicitationYahoo Finance · 2026-08-11
- Announcement of Private Exchange Offer for Any and All of CSN Inova Ventures’ Outstanding 6.750% Senior Notes due 2028 and Consent SolicitationYahoo Finance · 2026-07-31
- National Steel Q1 Earnings Miss Estimates on Softer Steel DemandYahoo Finance · 2026-05-15
- National Steel Q1 Earnings Call HighlightsYahoo Finance · 2026-05-15
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do Companhia Siderúrgica Nacional's financial-health indicators show?
As of 2026-10-08, Companhia Siderúrgica Nacional's public financial data places it in the 'Weak' band with a distress score of 62/100, driven by operating profit does not cover interest, market-implied default probability >20% and losses in each of the last 3 years. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is Companhia Siderúrgica Nacional's financial distress score?
62/100 ('Weak'). Ohlson O-score 0.1 (model 1-year failure probability 52%). Merton distance-to-default -0.7 σ (model default probability 75.9%).
What works in Companhia Siderúrgica Nacional's favour?
No material mitigating factors were found in the available data.
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
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Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.