Chatham Lodging Trust (Chatham Lodging Trust) Probability of Financial Distress (%) : 0.05% (As of Apr. 28, 2024)

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What is Chatham Lodging Trust 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, Chatham Lodging Trust's Probability of Financial Distress (%) is 0.05%.

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 Chatham Lodging Trust's Probability of Financial Distress (%)

For the REIT - Hotel & Motel subindustry, Chatham Lodging Trust'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.

Chatham Lodging Trust's Probability of Financial Distress (%) Distribution in the REITs Industry

For the REITs industry and Real Estate sector, Chatham Lodging Trust's Probability of Financial Distress (%) distribution charts can be found below:

* The bar in red indicates where Chatham Lodging Trust's Probability of Financial Distress (%) falls into.

Chatham Lodging Trust 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

-7.55

The Probability of Financial Distress (%) (PFD) was then obtianed by:

PFD	=	1	/	(1 + e^(-LPFD))	*	100%
	=	0.05%

The eight explanatory variables are:

1. NIMTAAVG = Net Income to Market Total Assets

NIMTAAVG	=	Net Income	/	Market Total Assets
	=	Net Income	/	(Market Cap + Total Liabilities)

*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

TLMTA

Total Liabilities

Market Total Assets

3. CASHMTA = Cash to Market Total Assets

For non-financial companies, CASHMTA is measured as:

CASHMTA

Cash, Cash Equivalents, Marketable Securities

Market Total Assets

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

MB	=	Market Cap	/	Adjusted Book Equity
	=	Market Cap	/	(Total Stockholders Equity + 0.1 * ( Market Cap - Total Stockholders Equity))

8. PRICE

PRICE is measured as the log of the stock price, capped at log(15).

Chatham Lodging Trust (NYSE:CLDT) Probability of Financial Distress (%) Explanation

Like the Altman Z-Score, the PFD measures a company's bankruptcy risk in the upcoming year. 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.

Chatham Lodging Trust Probability of Financial Distress (%) Related Terms

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Chatham Lodging Trust (Chatham Lodging Trust) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Chatham Lodging Trust (NYSE:CLDT) » Definitions » Probability of Financial Distress (%)

Comparable Companies

Traded in Other Exchanges

N/A

Address

222 Lakeview Avenue, Suite 200, West Palm Beach, FL, USA, 33401

Website

https://www.chathamlodgingtrust.com

Chatham Lodging Trust is a U.S.-based real estate investment trust that invests in upscale extended-stay hotels. The firm operates across various states in the U.S., including California, New York, Texas, Florida, Minnesota, Massachusetts, and Pennsylvania among others. Substantially all of the company's assets are held and operated by its Operating Partnership, Chatham Lodging, LP. Chatham Lodging LP and its subsidiaries lease the overall company's hotels. The firm operates through a single segment because of the similar economic characteristics of its hotels. Chatham's revenue streams include Room, Food and beverage, and Other. Room comprises the majority of total revenue. Chatham's hotels operate under major brands, including Hilton, Marriott, and Hyatt.

Executives

Ethel Issacs Williams	director	222 LAKEVIEW AVE, SUITE 200, WEST PALM BEACH FL 33401
Dennis M Craven	officer: EVP & Chief Financial Officer	850 RIDGE LAKE BLVD, STE 300, MEMPHIS TN 38120
Jeffrey H Fisher	director, officer: Chairman, President and CEO	50 COCOANUT ROW, SUITE 200, PALM BEACH FL 33480
David Grissen	director	10400 FERNWOOD ROAD, BETHESDA MD 20817
Robert D Perlmutter	director	THE MACERICH COMPANY, 401 WILSHIRE BLVD., SUITE 700, SANTA MONICA CA 90401
C Gerald Goldsmith	director	50 COCOANUT ROW, SUITE 200, PALM BEACH FL 33480
Mary Elizabeth Higgins	director	3525 E. POST ROAD #120, LAS VEGAS NV 89120
Peter Willis	officer: EVP & Chief Investment Officer	50 COCOANUT ROW, SUITE 200, PALM BEACH FL 33480
Brewer Edwin B Jr	director	C/O EDUCATION REALTY TRUST, INC., 999 SOUTH SHADY GROVE ROAD, SUITE 600, MEMPHIS TN 38120
Jeremy Bruce Wegner	officer: Chief Financial Officer	8000 PORTOFINO CIRCLE, APARTMENT 101, PALM BEACH GARDENS FL 33418
Chatham Lodging Trust	officer: Chief Financial Officer	222 LAKEVIEW AVENUE, SUITE 200, WEST PALM BEACH FL 33401
Joel F Zemans	director	50 COCOANUT ROW, SUITE 200, PALM BEACH FL 33480
Miles L Berger	director
Julio E Morales	officer: EVP, Chief Financial Officer	3 BETHESDA METRO CENTER, SUITE 1000, BETHESDA MD 20814
Thomas J Crocker	director	433 PLAZA REAL STE 335, BOCA RATON FL 33432