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Alibaba Group Holding Financial Strength

: 7 (As of Jun. 2022)
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Alibaba Group Holding has the Financial Strength Rank of 7.

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.

Alibaba Group Holding's Interest Coverage for the quarter that ended in Jun. 2022 was 20.05. Alibaba Group Holding's debt to revenue ratio for the quarter that ended in Jun. 2022 was 0.18. As of today, Alibaba Group Holding's Altman Z-Score is 2.96.


Competitive Comparison

For the Internet Retail subindustry, Alibaba Group Holding'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.

   

Alibaba Group Holding Financial Strength Distribution

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

* The bar in red indicates where Alibaba Group Holding's Financial Strength falls into.



Alibaba Group Holding 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:

Alibaba Group Holding's Interest Expense for the months ended in Jun. 2022 was $-186 Mil. Its Operating Income for the months ended in Jun. 2022 was $3,726 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2022 was $20,681 Mil.

Alibaba Group Holding'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*3725.5048392878/-185.80475564584
=20.05

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

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

Alibaba Group Holding'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
=(2023.6886127375 + 20680.786234915) / 122807.38439479
=0.18

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.

Alibaba Group Holding has a Z-score of 2.96, indicating it is in Grey Zones. This implies that Alibaba Group Holding is in some kind of financial stress. If it is below 1.81, the company may faces bankrupcy risk.

Warning Sign:

Altman Z-score of 2.96 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.

* 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.


Alibaba Group Holding  (NYSE:BABA) 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.

Alibaba Group Holding has the Financial Strength Rank of 7.


Alibaba Group Holding Financial Strength Related Terms

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


Alibaba Group Holding Business Description

Alibaba Group Holding logo
Address
969 West Wen Yi Road, Yu Hang District, Hangzhou, CHN, 311121
Alibaba is the world's largest online and mobile commerce company as measured by gross merchandise volume (CNY 7.5 trillion for the fiscal year ended March 2021). It operates China's online marketplaces, including Taobao (consumer-to-consumer) and Tmall (business-to-consumer). Alibaba's China commerce retail division accounted for 63% of revenue in the September 2021 quarter. Additional revenue sources include China commerce wholesale (2%), international retail/wholesale marketplaces (5%/2%), cloud computing (10%), digital media and entertainment platforms (4%), Cainiao logistics services (5%), and innovation initiatives/other (1%).

Alibaba Group Holding Headlines

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