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Ares Capital Financial Strength

: 3 (As of Jun. 2022)
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Ares Capital has the Financial Strength Rank of 3. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.

Warning Sign:

Ares Capital Corp 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.

GuruFocus does not calculate Ares Capital's interest coverage with the available data. Ares Capital's debt to revenue ratio for the quarter that ended in Jun. 2022 was 15.92. Altman Z-Score does not apply to banks and insurance companies.

Ares Capital 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:

Ares Capital's Interest Expense for the months ended in Jun. 2022 was $-101 Mil. Its Operating Income for the months ended in Jun. 2022 was $0 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2022 was $11,843 Mil.

Ares Capital's Interest Coverage for the quarter that ended in Jun. 2022 is

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

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

Ares Capital's Debt to Revenue Ratio for the quarter that ended in Jun. 2022 is

Debt to Revenue Ratio=Total Debt (Q: Jun. 2022 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(0 + 11843) / 744
=15.92

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.

Altman Z-Score does not apply to banks and insurance companies.

* 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.

Ares Capital  (NAS:ARCC) 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.

Ares Capital has the Financial Strength Rank of 3. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.

Ares Capital Financial Strength Related Terms

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

Ares Capital Business Description

Ares Capital logo
Industry
GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Ares Capital Corp (NAS:ARCC) » Definitions » Financial Strength
Comparable Companies
NYSE:IVZ NAS:SEIC NYSE:ARES NYSE:FSK NYSE:BEN NAS:CG NYSE:PDI NYSE:AMG NYSE:OWL NYSE:AB NYSE:BLK TSX:BAM.A NYSE:BX OSTO:INVE A NYSE:BK NYSE:KKR NYSE:APO NYSE:AMP XSWX:PGHN NAS:TROW
Traded in Other Exchanges
ARU:USA AFC:USA 0HHP:UK 9A2:Germany 9A2:Germany 9A2:Germany
Address
245 Park Avenue, 44th Floor, New York, NY, USA, 10167
Website
https://www.arescapitalcorp.com
Ares Capital Corp is a United States-based closed-ended specialty finance company. Its investment objective is to generate both current income and capital appreciation through debt and equity investments. The company focuses on investing primarily in U.S. middle-market companies with investment opportunities as well as in larger companies. Its portfolio comprises of first lien senior secured loans, second lien senior secured loans, and mezzanine debt (subordinated unsecured loan), which may include equity components that are diversified by industry and sector. The company may invest in preferred and common equity investments to a lesser proportion. Its revenue mainly consists of interest and dividend income received from the investment made.
Executives
Henson Mary Beth director 130 EAST 75TH STREET APT 7C NEW YORK NY 10021
Parks Michael K director 123 W MILLS EL PASO TX 79901
Kelly Daniel G Jr director 2000 AVENUE OF THE STARS, 12TH FLOOR LOS ANGELES CA 90067
Lem Scott C officer: CAO, VP & Treasurer 2000 AVENUE OF THE STARS, 12TH FLOOR LOS ANGELES CA 90067
Beckman Eric B officer: Executive Vice President 2000 AVENUE OF THE STARS 12TH FLOOR LOS ANGELES CA 90067
Goldstein Mitchell S officer: Executive Vice President 245 PARK AVENUE 44TH FLOOR NEW YORK NY 10167
Deveer R. Kipp officer: President 245 PARK AVENUE 44TH FLOOR NEW YORK NY 10167
Smith Michael Lewis officer: Executive Vice President 245 PARK AVENUE 44TH FLOOR NEW YORK NY 10167
Bartlett Steve director 7711 CARONDELET AVE SUITE 800 ST LOUIS MO 63105
Mckeever Steven B. director 2000 AVENUE OF THE STARS 12TH FLOOR LOS ANGELES CA 90067
Heitz Kenneth director 123 W MILLS EL PASO TX 79901
Roll Penelope F officer: Chief Financial Officer
Torre Bates Ann director 300 CONTINENTAL DRIVE NEWARK DE 19713
Bloomstein Joshua M officer: Gen. Counsel, VP & Asst. Secr. C/O ARES MANAGEMENT LLC 280 PARK AVENUE, 22ND FL EAST NEW YORK NY 10017
Penske Gregory W director 3534 NORTH PECK ROAD EL MONTE CA 91731
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