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Macau Legend Development (HKSE:01680) Financial Strength

: 2 (As of Jun. 2023)
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Macau Legend Development 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:

Macau Legend Development 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.

Macau Legend Development did not have earnings to cover the interest expense. Macau Legend Development's debt to revenue ratio for the quarter that ended in Jun. 2023 was 3.22. As of today, Macau Legend Development's Altman Z-Score is -0.32.


Competitive Comparison

For the Resorts & Casinos subindustry, Macau Legend Development'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.


Macau Legend Development Financial Strength Distribution

For the Travel & Leisure industry and Consumer Cyclical sector, Macau Legend Development's Financial Strength distribution charts can be found below:

* The bar in red indicates where Macau Legend Development's Financial Strength falls into.



Macau Legend Development 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:

Macau Legend Development's Interest Expense for the months ended in Jun. 2023 was HK$-88.7 Mil. Its Operating Income for the months ended in Jun. 2023 was HK$-91.1 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2023 was HK$2,073.6 Mil.

Macau Legend Development's Interest Coverage for the quarter that ended in Jun. 2023 is

Macau Legend Development did not have earnings to cover the interest expense.

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

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

Macau Legend Development's Debt to Revenue Ratio for the quarter that ended in Jun. 2023 is

Debt to Revenue Ratio=Total Debt (Q: Jun. 2023 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(635.892 + 2073.614) / 840.464
=3.22

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.

Macau Legend Development has a Z-score of -0.32, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.

Warning Sign:

Altman Z-score of -0.32 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.


Macau Legend Development  (HKSE:01680) 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.

Macau Legend Development 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.


Macau Legend Development Financial Strength Related Terms

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Macau Legend Development (HKSE:01680) Business Description

Traded in Other Exchanges
Address
Avenida da Amizade e Avenida da, Palace Building, Macau Fisherman’s Wharf, Dr. Sun Yat Sen, Macau, MAC
Macau Legend Development Ltd is an investment holdings company. The company is one of the owners of entertainment and casino gaming facilities in Macau. The company currently has Macau Fisherman's Wharf operated by MFW Investment (MFW), which is a waterfront integrated gaming, hotel, convention and entertainment complex located on the Macau Peninsula. The company's businesses include 1) the provision of gaming services to SJM for the operation of Legend Palace Casino; 2) the operation of casino inside Savan Legend Resorts Hotel and Entertainment Complex in the Lao People's Democratic Republic (Lao PDR); and 3) the operation of hotels, entertainment and leisure facilities within its properties.

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