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Tencent Holdings Financial Strength

: 6 (As of Jun. 2021)
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Tencent Holdings has the Financial Strength Rank of 6.

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.

Tencent Holdings's Interest Coverage for the quarter that ended in Jun. 2021 was 16.90. Tencent Holdings's debt to revenue ratio for the quarter that ended in Jun. 2021 was 0.53. As of today, Tencent Holdings's Altman Z-Score is 5.53.


Competitive Comparison

For the Internet Content & Information subindustry, Tencent Holdings'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.

   

Tencent Holdings Financial Strength Distribution

For the Interactive Media industry and Communication Services sector, Tencent Holdings's Financial Strength distribution charts can be found below:

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



Tencent Holdings 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:

Tencent Holdings's Interest Expense for the months ended in Jun. 2021 was $-298 Mil. Its Operating Income for the months ended in Jun. 2021 was $5,030 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2021 was $42,405 Mil.

Tencent Holdings's Interest Coverage for the quarter that ended in Jun. 2021 is

Interest Coverage=-1*Operating Income (Q: Jun. 2021 )/Interest Expense (Q: Jun. 2021 )
=-1*5029.5719844358/-297.58754863813
=16.90

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

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

Tencent Holdings's Debt to Revenue Ratio for the quarter that ended in Jun. 2021 is

Debt to Revenue Ratio=Total Debt (Q: Jun. 2021 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(2910.3501945525 + 42404.6692607) / 86075.642023346
=0.53

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.

Tencent Holdings has a Z-score of 5.53, indicating it is in Safe Zones. This implies the Z-Score is strong.

Good Sign:

Altman Z-score of 5.53 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.


Tencent Holdings  (OTCPK:TCEHY) 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.

Tencent Holdings has the Financial Strength Rank of 6.


Tencent Holdings Financial Strength Related Terms

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


Tencent Holdings Business Description

Tencent Holdings logo
Industry
Address
No. 33 Haitian 2nd Road, Tencent Binhai Towers, Nanshan District, Shenzhen, CHN, 518054
Tencent is a Chinese Internet giant with businesses and investments in a wide variety of Internet services and contents. Major services include communication and social networking (Weixin/Weixin and QQ), online PC and mobile games, content (news, videos, music, comics, and literature), utilities (email, app store, mobile security, and mobile browser), cloud services, and financial technology. Tenpay in Weixin/Weixin and QQ is a payment solution that enables closed-loop transactions in Tencent's ecosystems and has been adopted by many third-party partners and offline merchants. Tencent has an aggregate monthly active user base of less than 600 million for QQ and over 1.2 billion for Weixin/Weixin.

Tencent Holdings Headlines

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