My cat has bad breath, e.g. when yawning. Is that normal or is it a sign that he might have dental or digestive issues? Apart from that I haven't noticed anything out of the ordinary.
His menu mainly consists of "Royal Canin Indoor" dry food and cat grass.
The short answer to your question is yes, there is a possibility that extremely bad breath in a cat is a sign of either dental issues (such as tooth decay or gingivitis or worse) or of more general sickness that is not otherwise visible.
Alternately, you may be hyper-sensitive to the smell of that particular brand of cat food once ingested. One way to find out is to change brands, but just move to it slowly so that the cat acclimatizes to it. Cats are not keen on changes there.
The thing is, I think it's worthwhile assessing your cat a bit. If he doesn't seem appropriately active, perhaps more lethargic than usual, or sensitive to certain forms of petting, then getting a check up might be good. You can also inspect his teeth (they're a little fussy about that, but don't let him win) and see if things look okay. Yellow discoloration isn't a big problem, look for signs of really reddish and inflamed gums, loose teeth, blackening, etc. Any sign of that kind of thing and you should get him into the vet.
If all is well medically, try a new food. It may be that you're just not going to find a cat's breath that tolerable... I'm not a fan either. :)
It is normal: Cats, dogs, and humans all naturally have bad breath. It is mainly caused by bacteria in the mouth. The bacteria is normal and aside from some of these native species (normal flora) causing tooth decay and gum disease, it is harmless and may even serve some beneficial role like bacteria in the intestinal tract. Cat's breath will smell like cat food for a time after they eat, much like humans smelling of some of the things they eat.
The bacteria in their mouths is one of several biological weapons cats possess, one of many things that make cats interesting. When a cat bites another cat, they transfer some of these bacteria into the wound which often results in a serious and painful tissue-destroying infection.
John's answer is good in that if their breath smells unusual it may indicate a heath problem or that they ate something inappropriate. Cats can get periodontal abscesses (a form of gum disease), just like people, which can smell particularly foul.
If you just can't tolerate "cat food breath" you can get with your family veterinarian and put together a recipe for home made cat food with should smell better as it is often made of a specific balance of chicken, rice, a bit of vegetables, with some special cat vitamins added.
Puppies and kittens also have strong-smelling breath. Some people find puppy and kitten breath pleasant; probably because it reminds them of how much they like puppies and kittens.
