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Tencent Holdings Altman Z-Score

: 3.77 (As of Today)
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Good Sign:

Altman Z-score of 3.83 is strong.

Tencent Holdings has a Altman Z-Score of 3.77, indicating it is in Safe Zones. This implies the Altman Z-Score is strong.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The historical rank and industry rank for Tencent Holdings's Altman Z-Score or its related term are showing as below:

HKSE:00700' s Altman Z-Score Range Over the Past 10 Years
Min: 3.83   Med: 7.3   Max: 37.23
Current: 3.83

During the past 13 years, Tencent Holdings's highest Altman Z-Score was 37.23. The lowest was 3.83. And the median was 7.30.


Tencent Holdings Altman Z-Score Historical Data

The historical data trend for Tencent Holdings's Altman Z-Score can be seen below:

* 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.

* Premium members only.

Tencent Holdings Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
Altman Z-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 8.35 5.70 5.43 6.20 4.34

Tencent Holdings Quarterly Data
Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22
Altman Z-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.38 5.99 4.84 4.34 4.30

Competitive Comparison

For the Internet Content & Information subindustry, Tencent Holdings's Altman Z-Score, along with its competitors' market caps and Altman Z-Score 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 Altman Z-Score Distribution

For the Interactive Media industry and Communication Services sector, Tencent Holdings's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Tencent Holdings's Altman Z-Score falls into.



Tencent Holdings Altman Z-Score Calculation

Altman 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.

Tencent Holdings's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*0.0657+1.4*0.4704+3.3*0.1516+0.6*3.5993+1.0*0.3703
=3.77

* 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. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Mar. 2022:
Total Assets was HK$1,842,275 Mil.
Total Current Assets was HK$509,073 Mil.
Total Current Liabilities was HK$388,048 Mil.
Retained Earnings was HK$866,611 Mil.
Pre-Tax Income was 35759.046370142 + 121948.37847173 + 54866.088766012 + 56401.283984436 = HK$268,975 Mil.
Interest Expense was -2385.8270024903 + -3265.6544675239 + -2340.3682294813 + -2309.7852762646 = HK$-10,302 Mil.
Revenue was 167033.78287047 + 176553.50069866 + 171572.37080061 + 167023.32767315 = HK$682,183 Mil.
Market Cap (Today) was HK$2,879,690 Mil.
Total Liabilities was HK$800,061 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(509072.60006935 - 388047.67228825)/1842275.195032
=0.0657

X2=Retained Earnings/Total Assets
=866611.27837846/1842275.195032
=0.4704

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(268974.79759232 - -10301.63497576)/1842275.195032
=0.1516

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=2879689.976/800060.88434259
=3.5993

X5=Revenue/Total Assets
=682182.9820429/1842275.195032
=0.3703

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

Tencent Holdings has a Altman Z-Score of 3.77 indicating it is in Safe Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


Tencent Holdings  (HKSE:00700) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


Tencent Holdings Altman Z-Score Related Terms

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


Tencent Holdings Business Description

Tencent Holdings logo
Address
No. 33 Haitian 2nd Road, Tencent Binhai Towers, Nanshan District, Shenzhen, CHN, 518054
Tencent is arguably the most influential internet firm in China as one can hardly go by a day without using its products. Tencent is the world's largest video game vendor and owns the world's top-grossing mobile game--Honor of Kings. Tencent also runs China's largest social media super app--WeChat. The app is now part of the fabric of life for Chinese people who use it to chat, shop, watch videos, play games, order food and taxis, and more. Equally as impressive as its own portfolio, Tencent is also among the world's largest venture capital and investment corporations. The firm is now one of the largest shareholders in leading tech companies like Meituan, JD, DiDi, Snap, PDD, Kuaishou, Epic Games, and more.

Tencent Holdings Headlines

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