CDK Global 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:
CDK Global Inc 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.
CDK Global's Interest Coverage for the quarter that ended in Dec. 2020 was 3.31.
CDK Global's debt to revenue ratio for the quarter that ended in Dec. 2020 was 6.53.
As of today, CDK Global's Altman Z-Score is 3.02.
Competitive Comparison
* 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.
CDK Global Financial Strength Distribution
* The bar in red indicates where CDK Global's Financial Strength falls into.
CDK Global 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:
CDK Global's Interest Expense for the
months ended in Dec. 2020 was $-34 Mil. Its Operating Income for the
months ended in Dec. 2020 was $114 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Dec. 2020 was $2,334 Mil.
CDK Global's Interest Coverage for the quarter that ended in Dec. 2020 is
The higher the ratio, the stronger the company's financial strength is.
Warning Sign:
Ben Graham prefers companies interest coverage is at least 5. CDK Global Inc interest coverage is 3.57, which is low.
2. Debt to revenue ratio. The lower, the better.
CDK Global's Debt to Revenue Ratio for the quarter that ended in Dec. 2020 is
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.
CDK Global has a Z-score of 3.02, indicating it is in Safe Zones. This implies the Z-Score is strong.
Good Sign:
Altman Z-score of 3.02 is strong.
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
CDK Global Financial Strength Headlines
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