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Odakyu Electric Railway Co (TSE:9007) Financial Strength : 2 (As of Dec. 2023)


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What is Odakyu Electric Railway Co Financial Strength?

Odakyu Electric Railway Co has the Financial Strength Rank of 2. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.

Warning Sign:

Odakyu Electric Railway Co Ltd 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.

Odakyu Electric Railway Co's Interest Coverage for the quarter that ended in Dec. 2023 was 13.25. Odakyu Electric Railway Co's debt to revenue ratio for the quarter that ended in Dec. 2023 was 1.50. As of today, Odakyu Electric Railway Co's Altman Z-Score is 1.00.


Competitive Comparison of Odakyu Electric Railway Co's Financial Strength

For the Railroads subindustry, Odakyu Electric Railway Co'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.


Odakyu Electric Railway Co's Financial Strength Distribution in the Transportation Industry

For the Transportation industry and Industrials sector, Odakyu Electric Railway Co's Financial Strength distribution charts can be found below:

* The bar in red indicates where Odakyu Electric Railway Co's Financial Strength falls into.



Odakyu Electric Railway Co 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:

Odakyu Electric Railway Co's Interest Expense for the months ended in Dec. 2023 was 円-1,043 Mil. Its Operating Income for the months ended in Dec. 2023 was 円13,822 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Dec. 2023 was 円350,092 Mil.

Odakyu Electric Railway Co's Interest Coverage for the quarter that ended in Dec. 2023 is

Interest Coverage=-1*Operating Income (Q: Dec. 2023 )/Interest Expense (Q: Dec. 2023 )
=-1*13822/-1043
=13.25

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

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

Odakyu Electric Railway Co'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
=(232704 + 350092) / 389516
=1.50

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.

Odakyu Electric Railway Co has a Z-score of 1.00, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.

Warning Sign:

Altman Z-score of 1 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.


Odakyu Electric Railway Co  (TSE:9007) 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.

Odakyu Electric Railway Co has the Financial Strength Rank of 2. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.


Odakyu Electric Railway Co Financial Strength Related Terms

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Odakyu Electric Railway Co (TSE:9007) Business Description

Traded in Other Exchanges
Address
1-8-3 Nishishinjuku Shinjuku-ku, Tokyo, JPN, 160-8309
Odakyu Electric Railway Co Ltd is a Japanese company which provides transportation services. The company has three reportable segments namely Transportation, Merchandising and Real Estate. The Transportation segment provides services through railway, bus, taxi, sightseeing boat, and ropeway. Merchandising segment operates departmental stores and supermarket. Real Estate segment is engaged in the sale of land and buildings, leasing of buildings and others. The company also offers services including hotel, restaurant, travel agent, golf course, railway maintenance service, building management and maintenance, advertising agency, horticulture and gardening, bookkeeping service, insurance agency, nursing and child care. The majority of the company's revenue comes from transportation business.

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