What is Pick N Pay Stores Financial Strength?
Pick N Pay Stores 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:
Pick N Pay Stores 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.
Pick N Pay Stores did not have earnings to cover the interest expense.
Pick N Pay Stores's debt to revenue ratio for the quarter that ended in Feb. 2024 was 0.26.
As of today, Pick N Pay Stores's Altman Z-Score is 2.34.
Competitive Comparison of Pick N Pay Stores's Financial Strength
For the Department Stores subindustry, Pick N Pay Stores'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.
Pick N Pay Stores's Financial Strength Distribution in the Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, Pick N Pay Stores's Financial Strength distribution charts can be found below:
* The bar in red indicates where Pick N Pay Stores's Financial Strength falls into.
Pick N Pay Stores 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:
Pick N Pay Stores's Interest Expense for the
months ended in Feb. 2024 was R-1,337 Mil. Its Operating Income for the
months ended in Feb. 2024 was R-109 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Feb. 2024 was R20,965 Mil.
Pick N Pay Stores's Interest Coverage for the quarter that ended in Feb. 2024 is
| Pick N Pay Stores did not have earnings to cover the interest expense. |
The higher the ratio, the stronger the company's financial strength is.
Warning Sign:
Ben Graham prefers companies' interest coverage to be at least 5. Pick N Pay Stores Ltds earnings cannot cover its interest expense. If the situation continues, the company may have to issue more debt.
2. Debt to revenue ratio. The lower, the better.
Pick N Pay Stores's Debt to Revenue Ratio for the quarter that ended in Feb. 2024 is
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.
Pick N Pay Stores has a Z-score of 2.34, indicating it is in Grey Zones. This implies that Pick N Pay Stores 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 2.34 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.
Pick N Pay Stores (JSE:PIK) Business Description
Traded in Other Exchanges
Address
101 Rosmead Avenue, Pick n Pay Office Park, Kenilworth, Cape Town, WC, ZAF, 7708
Pick N Pay Stores Ltd is a South African multiformat and multichannel retailer. The company operates in South Africa, Namibia, Botswana, Zambia, Mozambique, Mauritius, Swaziland, and Lesotho. The company offers food and groceries, clothing, general merchandise, and services across multiple store formats, both franchised and owned. The customer base is mainly represented by middle-income South African consumer. The portfolio of stores is composed of supermarkets, hypermarkets, local shops, express shops, clothing shops, liquor stores, pharmacies, and an Internet shopping platform.
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