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Carvana Co Financial Strength

: 3 (As of Jun. 2022)
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Carvana Co 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:

Carvana Co 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.

Carvana Co did not have earnings to cover the interest expense. Carvana Co's debt to revenue ratio for the quarter that ended in Jun. 2022 was 0.55. As of today, Carvana Co's Altman Z-Score is 1.66.


Competitive Comparison

For the Internet Retail subindustry, Carvana Co'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.

   

Carvana Co Financial Strength Distribution

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

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



Carvana Co 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:

Carvana Co's Interest Expense for the months ended in Jun. 2022 was $-116 Mil. Its Operating Income for the months ended in Jun. 2022 was $-325 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2022 was $7,245 Mil.

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

Carvana Co did not have earnings to cover the interest expense.

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

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

Carvana Co'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
=(1330 + 7245) / 15536
=0.55

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.

Carvana Co has a Z-score of 1.66, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.

Warning Sign:

Altman Z-score of 1.66 is in distress zone. This implies bankruptcy possibility in the next two years.

* 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.


Carvana Co  (NYSE:CVNA) 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.

Carvana Co 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.


Carvana Co Financial Strength Related Terms

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


Carvana Co Business Description

Carvana Co logo
Traded in Other Exchanges
Address
1930 W. Rio Salado Parkway, Tempe, AZ, USA, 85281
Carvana Co is an e-commerce platform for buying and selling used cars. The company derives revenue from used vehicle sales, wholesale vehicle sales and other sales and revenues. The other sales and revenues include sales of loans originated and sold in securitization transactions or to financing partners, commissions received on VSCs and sales of GAP waiver coverage.
Executives
Taira Thomas officer: President, Special Projects TRUECAR, INC., 120 BROADWAY, SUITE 200 SANTA MONICA CA 90401
Spruce House Partnership (qp) Lp 10 percent owner 435 HUDSON ST #804 NEW YORK NY 10014
Spruce House Partnership Llc 10 percent owner 435 HUDSON STREET 8TH FLOOR NEW YORK NY 10014
Palmer Stephen R officer: Vice President of Accounting 1930 W RIO SALADO PKWY TEMPE AZ 85281
Parikh Neha director 1930 W. RIO SALADO PARKWAY TEMPE AZ 85281
Spruce House Capital Llc 10 percent owner 435 HUDSON STREET SUITE 804 NEW YORK NY 10014
Spruce House Partnership (ai) Lp 10 percent owner 435 HUDSON STREET 8TH FLOOR NEW YORK NY 10014
Stein Benjamin Forester 10 percent owner 435 HUDSON STREET SUITE 804 NEW YORK NY 10014
Sternberg Zachary 10 percent owner 435 HUDSON STREET SUITE 804 NEW YORK NY 10014
Spruce House Investment Management Llc 10 percent owner 435 HUDSON STREET 8TH FLOOR NEW YORK NY 10014
Purcell Bradley 10 percent owner 9 OLD KINGS HIGHWAY SOUTH, SUITE 300 DARIEN CT 06820
Heck Randall 10 percent owner 9 OLD KINGS HIGHWAY SOUTH, SUITE 300 DARIEN CT 06820
Goodnow Investment Group, Llc 10 percent owner 9 OLD KINGS HIGHWAY SOUTH DARIEN CT 06820
Fidel Kathryn L. 10 percent owner 5901 E. CALLE DEL NORTE PHOENIX AZ 85018
2014 Fidel Family Trust Dated June 16, 2014 10 percent owner 5901 E. CALLE DEL NORTE PHOENIX AZ 85018

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