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Pinduoduo Financial Strength

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

Good Sign:

Pinduoduo 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.

Pinduoduo's Interest Coverage for the quarter that ended in Mar. 2022 was 170.44. Pinduoduo's debt to revenue ratio for the quarter that ended in Mar. 2022 was 0.16. As of today, Pinduoduo's Altman Z-Score is 3.93.


Competitive Comparison

For the Internet Retail subindustry, Pinduoduo'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.

   

Pinduoduo Financial Strength Distribution

For the Retail - Cyclical industry and Consumer Cyclical sector, Pinduoduo's Financial Strength distribution charts can be found below:

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



Pinduoduo 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:

Pinduoduo's Interest Expense for the months ended in Mar. 2022 was $-2 Mil. Its Operating Income for the months ended in Mar. 2022 was $340 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Mar. 2022 was $2,287 Mil.

Pinduoduo's Interest Coverage for the quarter that ended in Mar. 2022 is

Interest Coverage=-1*Operating Income (Q: Mar. 2022 )/Interest Expense (Q: Mar. 2022 )
=-1*339.56529962488/-1.9922453740189
=170.44

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

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

Pinduoduo's Debt to Revenue Ratio for the quarter that ended in Mar. 2022 is

Debt to Revenue Ratio=Total Debt (Q: Mar. 2022 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(65.938908678246 + 2287.0853954544) / 15000.907228194
=0.16

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.

Pinduoduo has a Z-score of 3.93, indicating it is in Safe Zones. This implies the Z-Score is strong.

Good Sign:

Altman Z-score of 3.93 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.


Pinduoduo  (NAS:PDD) 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.

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


Pinduoduo Financial Strength Related Terms

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


Pinduoduo Business Description

Pinduoduo logo
Traded in Other Exchanges
Address
No. 533 Loushanguan Road, 28th Floor, Changning District, Shanghai, CHN, 200051
Pinduoduo is the third- largest e-commerce platform by gross merchandise volume and the largest platform by active buyer in China. In 2020, it achieved CNY 1,667.6 billion (USD 255.6 billion) of gross merchandise volume, and CNY 2,115.2 (USD 324.2) of annual spending per active buyer. It had 8.6 million active merchants in 2020 and 867 million active buyers in the year ended September 2021. It is one of the top two players in next-day grocery self-collect services (similar to community group purchasing), where groups of consumers place fresh food and grocery orders online and collect at designated self-collect points the next day with the help of "group leaders" in each community.

Pinduoduo Headlines

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