What is BroadSoft Probability of Financial Distress (%)?
Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, BroadSoft's Probability of Financial Distress (%) is 0.00%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
Competitive Comparison of BroadSoft's Probability of Financial Distress (%)
For the Software - Application subindustry, BroadSoft's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) 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.
BroadSoft's Probability of Financial Distress (%) Distribution in the Software Industry
For the Software industry and Technology sector, BroadSoft's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where BroadSoft's Probability of Financial Distress (%) falls into.
BroadSoft Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
| LPFD | = | -20.12 * NIMTAAVG | + | 1.60 * TLMTA | - | 7.88 * EXRETAVG | + | 1.55 * SIGMA | - | 0.005 * RSIZE | - | 2.27 * CASHMTA | + | 0.070 * MB | - | 0.09 * PRICE | - | 8.87 |
| = | 0.00 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.00% |
The eight explanatory variables are:
1. NIMTAAVG = Net Income to Market Total Assets
*Note that for companies reported quarterly, geometrically declining weighted quarterly Net Income data in latest four quarters are used.
2. TLMTA = Total liabilities to Market Total Assets
3. CASHMTA = Cash to Market Total Assets
For non-financial companies, CASHMTA is measured as:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
6. RSIZE = Relative Size
| RSIZE | = | log (Market Cap | / | Total Market Cap of S&P 500 companies) |
7. MB = Market to Adjusted Book Equity Ratio
8. PRICE
PRICE is measured as the log of the stock price, capped at log(15).
BroadSoft (BroadSoft) Business Description
Traded in Other Exchanges
N/A
Address
BroadSoft provides cloud-based software and services that enable telecommunications-service providers to deliver hosted Unified Communications to enterprise customers. UC-One is the firm's flagship communications and collaboration offering. It integrates real-time communication services such as instant messaging and web conferencing, with non-real-time services such as email and fax. The firm's clients are typically large telecommunications service providers, and their end-customers are enterprises in hospitality, government, education, and healthcare industries. A large majority of the firm's revenue is generated in the United States, but BroadSoft has a sizable presence in Asia-Pacific and Europe.
Executives
| Douglas L Maine |
director |
ALBEMARLE CORP, 451 FLORIDA ST, BATON ROUGE LA 70801 |
| Gavin Eva Sage |
director |
C/O GAP INC., TWO FOLSOM ST, SAN FRANCISCO CA 94105-1205 |
| Andrew M Geisse |
director |
208 S. AKARD ST., DALLAS TX 75202 |
| Gavin John J Jr |
director |
|
| Markley John D. Jr. |
director |
COLUMBIA CAPITAL, 201 NORTH UNION STREET, SUITE VA 22314 |
| Dino Dipalma |
officer: Chief Revenue Officer |
C/O BROADSOFT, INC., 9737 WASHINGTONIAN BOULEVARD, SUITE 350, GAITHERBURG MD 20878 |
| Patrick Joggerst |
officer: VP-Worldwide Sales |
C/O BROADSOFT, INC., 9737 WASHINGTONIAN BOULEVARD, SUITE 350, GAITHERSBURG MD 20878 |
| Charles L Ill |
director |
901 MARQUETTE AVENUE, SUITE 3200, MINNEAPOLIS MN 55402 |
| Robert P Goodman |
director |
1865 PALMER AVENUE, SUITE 104, LARCHMONT NY 10538 |
| Deer Management Co. Llc |
10 percent owner |
C/O BESSEMER VENTURE PARTNERS, 1865 PALMER AVENUE, SUITE 104, LARCHMONT NY 10538 |
| Andrew M. Miller |
director |
6001 AMERICA CENTER DR., SAN JOSE CA 95164 |
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