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Hydrofarm Holdings Group (Hydrofarm Holdings Group) Probability of Financial Distress (%) : 0.77% (As of May. 24, 2024)


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What is Hydrofarm Holdings Group 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, Hydrofarm Holdings Group's Probability of Financial Distress (%) is 0.77%.

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 Hydrofarm Holdings Group's Probability of Financial Distress (%)

For the Farm & Heavy Construction Machinery subindustry, Hydrofarm Holdings Group'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.


Hydrofarm Holdings Group's Probability of Financial Distress (%) Distribution in the Farm & Heavy Construction Machinery Industry

For the Farm & Heavy Construction Machinery industry and Industrials sector, Hydrofarm Holdings Group's Probability of Financial Distress (%) distribution charts can be found below:

* The bar in red indicates where Hydrofarm Holdings Group's Probability of Financial Distress (%) falls into.



Hydrofarm Holdings Group 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
=-4.85

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

PFD=1/(1 + e^(-LPFD))*100%
=0.77%

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


8. PRICE

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


Hydrofarm Holdings Group  (NAS:HYFM) 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.


Hydrofarm Holdings Group Probability of Financial Distress (%) Related Terms

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Hydrofarm Holdings Group (Hydrofarm Holdings Group) Business Description

Traded in Other Exchanges
Address
1510 Main Street, Shoemakersville, PA, USA, 19526
Hydrofarm Holdings Group Inc is a distributor and manufacturer of agriculture equipment and supplies. Some of its products include lighting solutions, growing media (i.e., premium soils and soil alternatives), nutrients, equipment, and supplies sold under proprietary, exclusive/preferred brands, or non-exclusive/distributed brands. The business is organized into two operating segments, the U.S. and Canada.
Executives
William Douglas Toler director, officer: CEO and Chairman of the Board 1 EAST ARMOUR BOULEVARD, KANSAS CITY MO 64111
Kevin Patrick O'brien officer: Chief Accounting Officer C/O CPI CARD GROUP INC., 10026 W. SAN JUAN WAY, SUITE 200, LITTLETON CO 80127
Terence Fitch officer: President 32 ORLE CIR, LITTLE ROCK AR 72223
Mark S Parker officer: Executive Vice President C/O HYDROFARM HOLDINGS GROUP, INC., 1510 MAIN STREET, SHOEMAKERSVILLE PA 19526
Patrick Chung director 13 CARNATION RD, THORNHILL A6 L3T 7V3
Joseph D Rumley officer: Chief Accounting Officer 1141 CUMMINGS ROAD, SANTA PAULA CA 93060
Renah Persofsky director 55 PRINCE ARTHUR AVENUE, #604, TORONTO A6 M5R 1B3
Susan Peters director 40 OLD MILITARY ROAD, HILTON HEAD SC 29928
Richard D Moss director 1715 WEST 38TH STREET, CHATTANOOGA TN 37409
Bruce John Lindeman officer: CFO 1500 PATHFINDER AVENUE, WESTLAKE VILLAGE CA 91362
Melisa Denis director 627 WESTHAVEN RD., COPPELL TX 75019
Chris Payne 10 percent owner C/O HAWTHORN EQUITY PARTNERS INC., PO BOX 1061, TORONTO DOMINION A6 M5K 1P2
John Tomes 10 percent owner C/O HAWTHORN EQUITY PARTNERS INC., PO BOX 1061, TORONTO DOMINION A6 M5K 1P2
Peter Wardenburg 10 percent owner 3 BEYER CT., NOVATO CA 94945

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