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Mitsubishi Heavy Industries (TSE:7011) Financial Strength : 3 (As of Dec. 2023)


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What is Mitsubishi Heavy Industries Financial Strength?

Mitsubishi Heavy Industries 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:

Mitsubishi Heavy Industries Ltd 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.

Mitsubishi Heavy Industries's Interest Coverage for the quarter that ended in Dec. 2023 was 4.68. Mitsubishi Heavy Industries's debt to revenue ratio for the quarter that ended in Dec. 2023 was 0.34. As of today, Mitsubishi Heavy Industries's Altman Z-Score is 2.01.


Competitive Comparison of Mitsubishi Heavy Industries's Financial Strength

For the Specialty Industrial Machinery subindustry, Mitsubishi Heavy Industries'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.


Mitsubishi Heavy Industries's Financial Strength Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, Mitsubishi Heavy Industries's Financial Strength distribution charts can be found below:

* The bar in red indicates where Mitsubishi Heavy Industries's Financial Strength falls into.



Mitsubishi Heavy Industries 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:

Mitsubishi Heavy Industries's Interest Expense for the months ended in Dec. 2023 was 円-19,578 Mil. Its Operating Income for the months ended in Dec. 2023 was 円91,660 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Dec. 2023 was 円797,753 Mil.

Mitsubishi Heavy Industries's Interest Coverage for the quarter that ended in Dec. 2023 is

Interest Coverage=-1*Operating Income (Q: Dec. 2023 )/Interest Expense (Q: Dec. 2023 )
=-1*91660/-19578
=4.68

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

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

Mitsubishi Heavy Industries's Debt to Revenue Ratio for the quarter that ended in Dec. 2023 is

Debt to Revenue Ratio=Total Debt (Q: Dec. 2023 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(845597 + 797753) / 4765576
=0.34

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.

Mitsubishi Heavy Industries has a Z-score of 2.01, indicating it is in Grey Zones. This implies that Mitsubishi Heavy Industries is in some kind of financial stress. If it is below 1.81, the company may faces bankrupcy risk.

Warning Sign:

Altman Z-score of 2.01 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.

* 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.


Mitsubishi Heavy Industries  (TSE:7011) 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.

Mitsubishi Heavy Industries 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.


Mitsubishi Heavy Industries Financial Strength Related Terms

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Mitsubishi Heavy Industries (TSE:7011) Business Description

Traded in Other Exchanges
Address
2-3 Marunouchi 3-chome, Chiyoda-ku, Tokyo, JPN, 100-8332
Mitsubishi Heavy Industries Ltd is engaged in the manufacturing and sale of ships, industrial machinery, and aircraft. The segments of the company are Energy, Plants and Infrastructure Systems, Logistics, Thermal and Drive Systems, and Aircraft, Defense, and Space. The company earns maximum revenue from the energy segment which handles clean gas, steam power systems, nuclear power systems, compressors, and marine machinery. The Plants and Infrastructure Systems segment of the company deals with commercial ships, engineering, machine tools, and machinery systems; Logistics, Thermal, and Drive Systems provide material handling systems, engines, HVAC systems, and automotive air-conditioners; and the Aircraft, Defense, and Space cover commercial aircraft, defense aircraft, and others.

Mitsubishi Heavy Industries (TSE:7011) Headlines

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