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Adobe Financial Strength

: 8 (As of May. 2022)
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Adobe has the Financial Strength Rank of 8. It shows strong financial strength and is unlikely to fall into distressed situations.

Good Sign:

Adobe 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.

Adobe's Interest Coverage for the quarter that ended in May. 2022 was 54.61. Adobe's debt to revenue ratio for the quarter that ended in May. 2022 was 0.27. As of today, Adobe's Altman Z-Score is 12.98.


Competitive Comparison

For the Software - Infrastructure subindustry, Adobe'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.

   

Adobe Financial Strength Distribution

For the Software industry and Technology sector, Adobe's Financial Strength distribution charts can be found below:

* The bar in red indicates where Adobe's Financial Strength falls into.



Adobe 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:

Adobe's Interest Expense for the months ended in May. 2022 was $-28 Mil. Its Operating Income for the months ended in May. 2022 was $1,529 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in May. 2022 was $4,069 Mil.

Adobe's Interest Coverage for the quarter that ended in May. 2022 is

Interest Coverage=-1*Operating Income (Q: May. 2022 )/Interest Expense (Q: May. 2022 )
=-1*1529/-28
=54.61

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

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

Adobe's Debt to Revenue Ratio for the quarter that ended in May. 2022 is

Debt to Revenue Ratio=Total Debt (Q: May. 2022 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(589 + 4069) / 17544
=0.27

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.

Adobe has a Z-score of 12.98, indicating it is in Safe Zones. This implies the Z-Score is strong.

Good Sign:

Altman Z-score of 12.98 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.


Adobe  (NAS:ADBE) 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.

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


Adobe Financial Strength Related Terms

Thank you for viewing the detailed overview of Adobe's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.


Adobe Business Description

Adobe logo
Address
345 Park Avenue, San Jose, CA, USA, 95110-2704
Adobe provides content creation, document management, and digital marketing and advertising software and services to creative professionals and marketers for creating, managing, delivering, measuring, optimizing and engaging with compelling content multiple operating systems, devices and media. The company operates with three segments: digital media content creation, digital experience for marketing solutions, and publishing for legacy products (less than 5% of revenue).
Executives
Biggs M. Brett director 702 SW 8TH STREET BENTONVILLE AR 72716
Neumann Spencer Adam director SIERRA INCOME CORPORATION 375 PARK AVE., SUITE 3304 NEW YORK NY 10152
Durn Daniel officer: EVP and CFO C/O APPLIED MATERIALS, INC. 3050 BOWERS AVENUE, P.O. BOX 58039 SANTA CLARA CA 95052-8039
Boulden Melanie director 345 PARK AVENUE SAN JOSE CA 95110
Chakravarthy Anil officer: EVP & GM, Digital Experience C/O INFORMATICA CORPORATION 2100 SEAPORT BOULEVARD REDWOOD CITY CA 94063
Chen Gloria officer: EVP, Strategy & Growth 345 PARK AVENUE SAN JOSE CA 95110
Pandey Dheeraj director C/O NUTANIX INC 1740 TECHNOLOGY DRIVE SAN JOSE CA 95110
Oberg Kathleen K. director 10400 FERNWOOD ROAD BETHESDA MD 20817
Garfield Mark S. officer: VP, CAO & Corp. Controller 345 PARK AVENUE SAN JOSE CA 95110-2704
Rao Dana officer: EVP, Gen. Counsel & Secretary 345 PARK AVE SAN JOSE CA 95110
Ricks David A director LILLY CORPORATE CENTER INDIANAPOLIS IN 46285
Belsky Scott officer: EVP, Chief Product Officer 345 PARK AVENUE SAN JOSE CA 95110
Murphy John Francis officer: SVP, CAO & Corp. Controller 2250 E. IMPERIAL HIGHWAY EL SEGUNDO CA 90245
Parasnis Abhay officer: SVP & CTO 345 PARK AVENUE SAN JOSE CA 95110
Geschke Charles M director, other: Co-Chairman of the Board C/O ADOBE SYSTEMS INC 345 PARK AVENUE P O BOX 2704 SAN JOSE CA 95110-2704

Adobe Headlines

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