GURUFOCUS.COM » STOCK LIST » USA » NAS » Teradyne Inc (NAS:TER) » Definitions » Financial Strength
Switch to:

Teradyne Financial Strength

: 9 (As of Jun. 2022)
View and export this data going back to 1979. Start your Free Trial

Teradyne has the Financial Strength Rank of 9. It shows strong financial strength and is unlikely to fall into distressed situations.

Good Sign:

Teradyne 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.

Teradyne's Interest Coverage for the quarter that ended in Jun. 2022 was 26.61. Teradyne's debt to revenue ratio for the quarter that ended in Jun. 2022 was 0.05. As of today, Teradyne's Altman Z-Score is 10.53.


Competitive Comparison

For the Semiconductor Equipment & Materials subindustry, Teradyne'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.

   

Teradyne Financial Strength Distribution

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

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



Teradyne 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:

Teradyne's Interest Expense for the months ended in Jun. 2022 was $-9 Mil. Its Operating Income for the months ended in Jun. 2022 was $250 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2022 was $128 Mil.

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

Interest Coverage=-1*Operating Income (Q: Jun. 2022 )/Interest Expense (Q: Jun. 2022 )
=-1*250.034/-9.398
=26.61

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

Good Sign:

Ben Graham prefers companies' interest coverage to be at least 5. Teradyne Inc has enough cash to cover all of its debt. Its financial situation is stable.

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

Teradyne'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
=(27.402 + 127.547) / 3363.064
=0.05

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.

Teradyne has a Z-score of 10.53, indicating it is in Safe Zones. This implies the Z-Score is strong.

Good Sign:

Altman Z-score of 10.53 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.


Teradyne  (NAS:TER) 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.

Teradyne has the Financial Strength Rank of 9. It shows strong financial strength and is unlikely to fall into distressed situations.


Teradyne Financial Strength Related Terms

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


Teradyne Business Description

Teradyne logo
Address
600 Riverpark Drive, North Reading, MA, USA, 01864
Teradyne provides testing equipment, including automated test equipment for semiconductors, system testing for hard disk drives, circuit boards, and electronics systems and wireless testing for devices. The firm entered the industrial automation market in 2015, into which it sells collaborative and autonomous robots for factory applications. Teradyne serves numerous end markets and geographies directly and indirectly with its products, but its most significant exposure is to semiconductor testing, which made up 71% of 2021 sales. Teradyne serves vertically integrated, fabless, and foundry chipmakers with its equipment.
Executives
Herweck Peter director 600 RIVERPARK DRIVE NORTH READING MA 01864
Tufano Paul J director C/O SOLECTRON CORPORATION 847 GIBRALTAR DR. MILPITAS CA 95035
Tamer Ford director 3945 FREEDOM CIRCLE SUITE 1100 SANTA CLARA CA 95054
Burns Richard John officer: President, Semiconductor Test MINDSPEED TECHNOLOGIES, INC. 9 TECHNOLOGY DRIVE WESTBOROUGH MA 01581
Johnson Mercedes director MICRON TECHNOLOGY, INC 8000 S FEDERAL WAY, MS 1-557 BOISE ID 83716
Vallee Roy director 2211 S 47TH ST PHOENIX AZ 85034
Matz Marilyn director C/O LOGMEIN, INC. 320 SUMMER STREET BOSTON MA 02210
Guertin Timothy E director C/O VARIAN MEDICAL SYSTEMS, INC 3100 HANSEN WAY M/S E-327 PALO ALTO CA 94304
Gillis Edwin J director C/O VERITAS SOFTWARE CORP 350 ELLIS STREET MOUNTAIN VIEW CA 94043
Bradley Michael A director 8 BARNSTABLE ROAD WEST NEWTON MA 02465
Smith Gregory Stephen officer: President, Semiconductor Test 1 HUCKLEBERRY RD HOPKINTON MA 01748-1054
Jagiela Mark E director, officer: President and CEO 321 HARRISON AVE C/O TERADYNE INC BOSTON MA 02118
Gray Charles Jeffrey officer: VP, General Counsel, Secretary 600 RIVERPARK DRIVE NORTH READING MA 01864
Robbins Brad officer: President, LitePoint Corp. C O LITEPOINT 965 WEST MAUDE AVE SUNNYVALE CA 94085
Mehta Sanjay officer: VP and Chief Financial Officer C/O TERADYNE INC., 600 RIVERPARK DRIVE NORTH READING MA 01864

Teradyne Headlines

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)