What is LSB Industries 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, LSB Industries'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 LSB Industries's Probability of Financial Distress (%)
For the Chemicals subindustry, LSB Industries'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.
LSB Industries's Probability of Financial Distress (%) Distribution in the Chemicals Industry
For the Chemicals industry and Basic Materials sector, LSB Industries's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where LSB Industries's Probability of Financial Distress (%) falls into.
LSB Industries 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 |
| = | -7.69 |
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
*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).
LSB Industries (LSB Industries) Business Description
Traded in Other Exchanges
Address
3503 North West 63rd Street, Suite 500, Oklahoma City, OK, USA, 73116
LSB Industries Inc is engaged in the manufacturing and sale of chemical products in the United States. The company manufactures and sells chemical products for the agricultural, industrial, and mining markets. Its products include ammonia, fertilizer grade ammonium nitrate (AN and HDAN), and urea ammonia nitrate (UAN) for agricultural applications; high purity and commercial grade ammonia, sulfuric acids, concentrated, blended, and regular nitric acid, mixed nitrating acids, carbon dioxide, and diesel exhaust fluid for industrial applications; and industrial grade AN (LDAN) and AN solutions for mining applications. Its products are sold through distributors and directly to end customers throughout the United States.
Executives
| Lsb Funding Llc |
10 percent owner |
350 PARK AVENUE, 14TH FLOOR, NEW YORK NY 10022 |
| Sbt Investors Llc |
10 percent owner |
600 STEAMBOAT ROAD, SUITE 200, GREENWICH CT 06830 |
| Todd L Boehly |
10 percent owner |
600 STEAMBOAT ROAD, GREENWICH CT 06830 |
| Diana M Peninger |
director |
3503 NW 63RD ST, SUITE 500, OKLAHOMA CITY OK 73116 |
| Steven L Packebush |
director |
3503 NW 63RD STREET, SUITE 500, OKLAHOMA CITY OK 73116-2238 |
| Damien Renwick |
officer: Chief Commercial Officer |
3503 NW 63RD STREET, SUITE 500, OKLAHOMA CITY OK 73116 |
| Kristy Carver |
officer: V Pres-Corporate Taxation |
16 SOUTH PENNSYLVANIA AVENUE, OKLAHOMA CITY OK 73107 |
| Lynn F White |
director |
C/O CF INDUSTRIES HOLDINGS, INC., 4 PARKWAY NORTH, SUITE 400, DEERFIELD IL 60015 |
| Harold L Rieker |
officer: Vice President/Prin Acctg Off |
16 SOUTH PENNSYLVANIA AVENUE, OKLAHOMA CITY OK 73107 |
| John Burns |
officer: Executive Vice President-Mfg |
3503 NW 63RD ST, SUITE 500, OKLAHOMA CITY OK 73116 |
| Mark T Behrman |
officer: SR. VP-Corporate Development |
|
| Richard Roedel |
director |
164 WEST RD, NEW CANAAN CT 06840 |
| Cheryl Maguire |
officer: Sr. VP/CFO |
3503 NW 63RD ST, SUITE 500, OKLAHOMA CITY OK 73116 |
| Kanna Kitamura |
director |
350 PARK AVENUE, 14TH FLOOR, NEW YORK NY 10022 |
| Sanders Richard S Jr |
director |
16 SOUTH PENNSYLVANIA AVENUE, OKLAHOMA CITY OK 73107 |
LSB Industries (LSB Industries) Headlines
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