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Sprouts Farmers Market Financial Strength

: 5 (As of Sep. 2019)
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Sprouts Farmers Market has the Financial Strength Rank of 5.

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.

Sprouts Farmers Market's Interest Coverage for the quarter that ended in Sep. 2019 was 7.69. Sprouts Farmers Market's debt to revenue ratio for the quarter that ended in Sep. 2019 was 1.19. As of today, Sprouts Farmers Market's Altman Z-Score is 2.79.


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* 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.


Sprouts Farmers Market Financial Strength Distribution

* The bar in red indicates where Sprouts Farmers Market's Financial Strength falls into.



Sprouts Farmers Market 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:

Sprouts Farmers Market's Interest Expense for the months ended in Sep. 2019 was $-5 Mil. Its Operating Income for the months ended in Sep. 2019 was $42 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Sep. 2019 was $1,635 Mil.

Sprouts Farmers Market's Interest Coverage for the quarter that ended in Sep. 2019 is

Interest Coverage=-1*Operating Income (Q: Sep. 2019 )/Interest Expense (Q: Sep. 2019 )
=-1*41.676/-5.416
=7.69

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

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

Sprouts Farmers Market's Debt to Revenue Ratio for the quarter that ended in Sep. 2019 is

Debt to Revenue Ratio=Total Debt (Q: Sep. 2019 ) / Revenue (Q: Sep. 2019 )
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(84.984 + 1634.571) / 1440.222
=1.19

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.

Sprouts Farmers Market has a Z-score of 2.79, indicating it is in Grey Zones. This implies that Sprouts Farmers Market is in some kind of financial stress. If it is below 1.81, the company may faces bankrupcy risk.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Sprouts Farmers Market  (NAS:SFM) 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.

Sprouts Farmers Market has the Financial Strength Rank of 5.


Sprouts Farmers Market Financial Strength Related Terms


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