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Zoom Video Communications Altman Z-Score

: 27.75 (As of Today)
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Good Sign:

Altman Z-score of 27.82 is strong.

Zoom Video Communications has a Altman Z-Score of 27.75, 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 Zoom Video Communications's Altman Z-Score or its related term are showing as below:

NAS:ZM' s Altman Z-Score Range Over the Past 10 Years
Min: 20.55   Med: 36.93   Max: 52.77
Current: 27.82

20.55
52.77

During the past 5 years, Zoom Video Communications's highest Altman Z-Score was 52.77. The lowest was 20.55. And the median was 36.93.


Zoom Video Communications Altman Z-Score Historical Data

The historical data trend for Zoom Video Communications'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.

Zoom Video Communications Annual Data
Trend Jan17 Jan18 Jan19 Jan20 Jan21
Altman Z-Score
- - - 29.25 47.50

Zoom Video Communications Quarterly Data
Jan17 Jan18 Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21
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 31.73 52.77 47.50 35.34 38.51

Competitive Comparison

For the Software - Application subindustry, Zoom Video Communications'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.

   

Zoom Video Communications Altman Z-Score Distribution

For the Software industry and Technology sector, Zoom Video Communications's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Zoom Video Communications's Altman Z-Score falls into.



Zoom Video Communications 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.

Zoom Video Communications'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*0.6374+1.4*0.187+3.3*0.1558+0.6*42.754+1.0*0.5589
=27.75

* 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 Jul. 2021:
Total Assets was $6,509 Mil.
Total Current Assets was $5,835 Mil.
Total Current Liabilities was $1,686 Mil.
Retained Earnings was $1,217 Mil.
Pre-Tax Income was 323.884 + 228.931 + 264.653 + 194.021 = $1,011 Mil.
Interest Expense was -2.795 + 0 + 0 + 0 = $-3 Mil.
Revenue was 1021.495 + 956.237 + 882.485 + 777.196 = $3,637 Mil.
Market Cap (Today) was $79,131 Mil.
Total Liabilities was $1,851 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
=(5835.079 - 1686.373)/6508.593
=0.6374

X2=Retained Earnings/Total Assets
=1217.083/6508.593
=0.187

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(1011.489 - -2.795)/6508.593
=0.1558

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=79131.104/1850.845
=42.754

X5=Revenue/Total Assets
=3637.413/6508.593
=0.5589

The zones of discrimination were as such:

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

Zoom Video Communications has a Altman Z-Score of 27.75 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.


Zoom Video Communications  (NAS:ZM) 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.


Zoom Video Communications Altman Z-Score Related Terms

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


Zoom Video Communications Business Description

Zoom Video Communications logo
Industry
Technology » Software NAICS : 511210 SIC : 7372
Traded in Other Exchanges
Address
55 Almaden Boulevard, 6th Floor, San Jose, CA, USA, 95113
Zoom Video Communications provides a communications platform that connects people through video, voice, chat, and content sharing. The company's cloud-native platform enables face-to-face video and connects users across various devices and locations in a single meeting. Zoom, which was founded in 2011 and is headquartered in San Jose, California, serves companies of all sizes from all industries around the world.
Executives
Bawa Aparna officer: Chief Operating Officer C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Pelosi Janine officer: Chief Marketing Officer C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Hammonds Kimberly director 100 EAST DAVIE STREET RALEIGH NC 27601
Crehan Shane officer: Chief Accounting Officer C/O EVENTBRITE, INC. 155 5TH STREET, 7TH FLOOR SAN FRANCISCO CA 94103
Yuan Eric S. director, 10 percent owner, officer: Chief Executive Officer C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Mcmaster Herbert Raymond director C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Steckelberg Kelly officer: Chief Financial Officer C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Gassner Peter P director C/O VEEVA SYSTEMS INC. 4280 HACIENDA DRIVE PLEASANTON CA 94588
Chadwick Jonathan director 3401 HILLVIEW AVENUE PALO ALTO CA 94304
Azus Ryan officer: Chief Revenue Officer C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Swanson Bart director C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Benhorin Roy officer: Chief Accounting Officer C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Sankarlingam Velchamy officer: Pres. of Engineering & Product C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Subotovsky Santiago director C/O EMERGENCE CAPITAL PARTNERS 160 BOVENT ROAD SUITE 300 SAN MATEO CA 94402
Emergence Equity Partners Iii, L.p. 10 percent owner 160 BOVET ROAD, SUITE 300 SAN MATEO CA 94402

Zoom Video Communications Headlines

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