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VMware Financial Strength

: 4 (As of Apr. 2022)
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VMware has the Financial Strength Rank of 4.

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.

VMware's Interest Coverage for the quarter that ended in Apr. 2022 was 5.75. VMware's debt to revenue ratio for the quarter that ended in Apr. 2022 was 1.04. As of today, VMware's Altman Z-Score is 1.67.


Competitive Comparison

For the Software - Infrastructure subindustry, VMware'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.

   

VMware Financial Strength Distribution

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

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



VMware 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:

VMware's Interest Expense for the months ended in Apr. 2022 was $-71 Mil. Its Operating Income for the months ended in Apr. 2022 was $408 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Apr. 2022 was $12,853 Mil.

VMware's Interest Coverage for the quarter that ended in Apr. 2022 is

Interest Coverage=-1*Operating Income (Q: Apr. 2022 )/Interest Expense (Q: Apr. 2022 )
=-1*408/-71
=5.75

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

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

VMware's Debt to Revenue Ratio for the quarter that ended in Apr. 2022 is

Debt to Revenue Ratio=Total Debt (Q: Apr. 2022 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(0 + 12853) / 12352
=1.04

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.

VMware has a Z-score of 1.67, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.

Warning Sign:

Altman Z-score of 1.67 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.


VMware  (NYSE:VMW) 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.

VMware has the Financial Strength Rank of 4.


VMware Financial Strength Related Terms

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


VMware Business Description

VMware logo
Address
3401 Hillview Avenue, Palo Alto, CA, USA, 94304
VMware is an industry leader in virtualizing IT infrastructure and became a stand-alone entity after spinning off from Dell Technologies in November 2021. The software provider operates in the three segments: licenses; subscriptions and software as a service; and services. VMware's solutions are used across IT infrastructure, application development, and cybersecurity teams, and the company takes a neutral approach to being the cohesion between cloud environments. The Palo Alto, California, firm operates and sells on a global scale, with about half its revenue from the United States, through direct sales, distributors, and partnerships.
Executives
Verdecanna Pebbie L officer: Interim CAO 3401 HILLVIEW AVENUE PALO ALTO CA 94304
Anasenes Nicole director 2600 ANSYS DRIVE CANONSBURG PA 15317
Slta Spv-2 (gp), L.l.c. director, 10 percent owner C/O SILVER LAKE 2775 SAND HILL ROAD, SUITE 100 MENLO PARK CA 94025
Slta Spv-2, L.p. director, 10 percent owner C/O SILVER LAKE 2775 SAND HILL ROAD, SUITE 100 MENLO PARK CA 94025
Silver Lake Technology Investors V, L.p. director, 10 percent owner C/O SILVER LAKE 2775 SAND HILL ROAD, SUITE 100 MENLO PARK CA 94025
Slta V (gp), L.l.c. director, 10 percent owner C/O SILVER LAKE 2775 SAND HILL ROAD, SUITE 100 MENLO PARK CA 94025
Silver Lake Technology Associates V, L.p. director, 10 percent owner C/O SILVER LAKE 2775 SAND HILL ROAD, SUITE 100 MENLO PARK CA 94025
Silver Lake Partners V De (aiv), L.p. director, 10 percent owner C/O SILVER LAKE 2775 SAND HILL ROAD, SUITE 100 MENLO PARK CA 94025
Sl Spv-2, L.p. director, 10 percent owner C/O SILVER LAKE 2775 SAND HILL ROAD, SUITE 100 MENLO PARK CA 94025
Dell Inc 10 percent owner ONE DELL WAY ROUND ROCK TX 78682
Dhawan Sumit officer: President 3401 HILLVIEW AVENUE PALO ALTO CA 94304
Denman Kenneth D director
Brown Marianne Catherine director 4094 TIMUQUANA ROAD JACKSONVILLE FL 33210-8571
Vmw Holdco Llc director, 10 percent owner ONE DELL WAY ROUND ROCK TX 78682
Brulard Jean Pierre officer: EVP, Worldwide Sales 3401 HILLVIEW AVENUE PALO ALTO CA 94304

VMware Headlines

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