Electronic Arts (NAS:EA) Financial Strength

: 8 (As of Mar. 2023)

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Electronic Arts has the Financial Strength Rank of 8. It shows strong financial strength and is unlikely to fall into distressed situations.

Good Sign:

Electronic Arts Inc shows strong financial strength.

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.

Electronic Arts's Interest Coverage for the quarter that ended in Mar. 2023 was 16.82. Electronic Arts's debt to revenue ratio for the quarter that ended in Mar. 2023 was 0.26. As of today, Electronic Arts's Altman Z-Score is 5.10.

Competitive Comparison

For the Electronic Gaming & Multimedia subindustry, Electronic Arts'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.

Annual Data Quarterly Data

Electronic Arts Financial Strength Distribution

For the Interactive Media industry and Communication Services sector, Electronic Arts's Financial Strength distribution charts can be found below:

* The bar in red indicates where Electronic Arts's Financial Strength falls in comparison to its industry or sector. The grey bar indicates the Financial Strength's extreme value range as defined by GuruFocus.

Electronic Arts 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:

Electronic Arts's Interest Expense for the months ended in Mar. 2023 was $-17 Mil. Its Operating Income for the months ended in Mar. 2023 was $286 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Mar. 2023 was $1,880 Mil.

Electronic Arts's Interest Coverage for the quarter that ended in Mar. 2023 is

Interest Coverage	=	-1	*	Operating Income (Q: Mar. 2023 )	/	Interest Expense (Q: Mar. 2023 )
	=	-1	*	286	/	-17
	=	16.82

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

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

Electronic Arts's Debt to Revenue Ratio for the quarter that ended in Mar. 2023 is

Debt to Revenue Ratio	=	Total Debt (Q: Mar. 2023 )			/	Revenue
	=	(Short-Term Debt & Capital Lease Obligation	+	Long-Term Debt & Capital Lease Obligation)	/	Revenue
	=	(66	+	1880)	/	7496
	=	0.26

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.

Electronic Arts has a Z-score of 5.10, indicating it is in Safe Zones. This implies the Z-Score is strong.

Good Sign:

Altman Z-score of 5.1 is strong.

* 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.

Electronic Arts (NAS:EA) 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.

Electronic Arts has the Financial Strength Rank of 8. It shows strong financial strength and is unlikely to fall into distressed situations.

Electronic Arts Financial Strength Related Terms

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Electronic Arts (NAS:EA) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Interactive Media » Electronic Arts Inc (NAS:EA) » Definitions » Financial Strength

Comparable Companies

Traded in Other Exchanges

EA:Mexico ERT:Germany EAIN34:Brazil EA:Austria

Address

209 Redwood Shores Parkway, Redwood City, CA, USA, 94065

Website

https://www.ea.com

EA is one of the world's largest third-party video game publishers and has transitioned from a console-based video game publisher to the one of the largest publishers on consoles, PC, and mobile. The firm owns number of large franchises, including Madden, FIFA, Battlefield, Apex Legends, Mass Effect, Dragon's Age, and Need for Speed.

Executives

Chris Suh	officer: Chief Financial Officer	C/O CARDLYTICS, INC., 675 PONCE DE LEON AVE. NE, STE 6000, ATLANTA GA 30308
Rachel A Gonzalez	director	3150 SABRE DRIVE, SOUTHLAKE TX 76092
Eric Charles Kelly	officer: Chief Accounting Officer	209 REDWOOD SHORES PARKWAY, REDWOOD CITY CA 94065
Kofi A Bruce	director	GENERAL MILLS, INC., ONE GENERAL MILLS BLVD., MINNEAPOLIS MN 55426
Matthew Bilbey	officer: EVP of Strategic Growth	209 REDWOOD SHORES PARKWAY, REDWOOD CITY CA 94065
Kenneth A Moss	officer: Chief Technology Officer	209 REDWOOD SHORES PKWY, REDWOOD CITY CA 94061
Kenneth A Barker	officer: Chief Accounting Officer	C/O ELECTRONIC ARTS INC., 209 REDWOOD SHORES PARKWAY, REDWOOD CITY CA 94065
Joel Linzner	officer: EVP Worldwide Business Affairs	209 REDWOOD SHORES PARKWAY, REDWOOD CITY, CA 94065
Blake J Jorgensen	officer: COO & CFO	209 REDWOOD SHORES PARKWAY, REDWOOD CITY CA 94065
Probst Lawrence F Iii	director	209 REDWOOD SHORES PARKWAY, REDWOOD CITY CA 94065
Vivek Paul	director	C/O ELECTRONIC ARTS, 209 REDWOOD SHORES PARKWAY, REDWOOD CITY CA 94065
Chris Bruzzo	officer: Chief Marketing Officer	411 FIRST AVE., SOUTH, SUITE 700, SEATTLE WA 98104
Andrew Wilson	director, officer: Chief Executive Officer	209 REDWOOD SHORES PKWY, REDWOOD CITY CA 94065
Denise Warren	director	209 REDWOOD SHORES PKWY, REDWOOD CITY CA 94065
Patrick Soderlund	officer: Chief Design Officer	209 REDWOOD SHORES PKWY, REDWOOD CITY CA 94065