Arkan Al-Kuwait Real Estate Co KSCC (KUW:ARKAN) Financial Strength : 1 (As of Apr. 2024)

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What is Arkan Al-Kuwait Real Estate Co KSCC Financial Strength?

Arkan Al-Kuwait Real Estate Co KSCC has the Financial Strength Rank of 1. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.

Warning Sign:

Arkan Al-Kuwait Real Estate Co KSCC 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.

Arkan Al-Kuwait Real Estate Co KSCC's Interest Coverage for the quarter that ended in Apr. 2024 was 0.97. Arkan Al-Kuwait Real Estate Co KSCC's debt to revenue ratio for the quarter that ended in Apr. 2024 was 9.29. As of today, Arkan Al-Kuwait Real Estate Co KSCC's Altman Z-Score is 0.21.

Competitive Comparison of Arkan Al-Kuwait Real Estate Co KSCC's Financial Strength

For the Real Estate Services subindustry, Arkan Al-Kuwait Real Estate Co KSCC'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.

Arkan Al-Kuwait Real Estate Co KSCC's Financial Strength Distribution in the Real Estate Industry

For the Real Estate industry and Real Estate sector, Arkan Al-Kuwait Real Estate Co KSCC's Financial Strength distribution charts can be found below:

* The bar in red indicates where Arkan Al-Kuwait Real Estate Co KSCC's Financial Strength falls into.

Arkan Al-Kuwait Real Estate Co KSCC 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:

Arkan Al-Kuwait Real Estate Co KSCC's Interest Expense for the months ended in Apr. 2024 was KWD-0.77 Mil. Its Operating Income for the months ended in Apr. 2024 was KWD0.74 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Apr. 2024 was KWD89.17 Mil.

Arkan Al-Kuwait Real Estate Co KSCC's Interest Coverage for the quarter that ended in Apr. 2024 is

Interest Coverage	=	-1	*	Operating Income (Q: Apr. 2024 )	/	Interest Expense (Q: Apr. 2024 )
	=	-1	*	0.744	/	-0.765
	=	0.97

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

Warning Sign:

Ben Graham prefers companies' interest coverage to be at least 5. Arkan Al-Kuwait Real Estate Co KSCC interest coverage is 3.54, which is low.

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

Arkan Al-Kuwait Real Estate Co KSCC's Debt to Revenue Ratio for the quarter that ended in Apr. 2024 is

Debt to Revenue Ratio	=	Total Debt (Q: Apr. 2024 )			/	Revenue
	=	(Short-Term Debt & Capital Lease Obligation	+	Long-Term Debt & Capital Lease Obligation)	/	Revenue
	=	(11.536	+	89.17)	/	10.84
	=	9.29

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.

Arkan Al-Kuwait Real Estate Co KSCC has a Z-score of 0.21, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.

Warning Sign:

Altman Z-score of 0.21 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.

Arkan Al-Kuwait Real Estate Co KSCC (KUW:ARKAN) 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.

Arkan Al-Kuwait Real Estate Co KSCC Financial Strength Related Terms

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Arkan Al-Kuwait Real Estate Co KSCC (KUW:ARKAN) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » Real Estate » Arkan Al-Kuwait Real Estate Co KSCC (KUW:ARKAN) » Definitions » Financial Strength

Comparable Companies

Traded in Other Exchanges

N/A

Address

Alshuhadaa Street, P.O. Box 20678, Al Hamra Tower, 66th Floor, Sharq, Safat, Kuwait City, KWT, 13067

Website

https://www.arkanalkuwait.com

Arkan Al-Kuwait Real Estate Co KSCC is a real estate company that offers direct real estate investment and property management services. It is involved in the construction of Commercial and Residential projects. The firm offers consulting services, specialized investment studies, research, and feasibility reports. The company generates the majority of revenue from Rent.

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