What is NVE 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, NVE's Probability of Financial Distress (%) is 0.02%.
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 NVE's Probability of Financial Distress (%)
For the Semiconductors subindustry, NVE'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.
NVE's Probability of Financial Distress (%) Distribution in the Semiconductors Industry
For the Semiconductors industry and Technology sector, NVE's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where NVE's Probability of Financial Distress (%) falls into.
NVE 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 |
| = | -8.50 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.02% |
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).
NVE (NVEC) Business Description
Traded in Other Exchanges
Address
11409 Valley View Road, Eden Prarie, MN, USA, 55344
NVE Corp develops and sells devices that use spintronics, a nanotechnology that relies on electron spin. It manufactures high-performance spintronic products including sensors and couplers that are used to acquire and transmit data. The company's products include Digital sensors, Medical sensors, Rotation Sensors, GT Sensors, Angle Sensors, Analog sensors, MSOP Isolators, Passive-In Transceivers, and others. The company manufactures high-performance spintronic products including sensors and couplers. The company's designs are based on giant magnetoresistance GMR and tunneling magnetoresistance TMR combined with integrated circuitry.
Executives
| Patricia M Hollister |
director |
3455 LYMAN BLVD, CHASKA MN 55318-3052 |
| Daniel A Baker |
director, officer: President and CEO |
11409 VALLEY VIEW ROAD, EDEN PRAIRIE MN 55344-3617 |
| Terrence Glarner |
director |
160 MONTROSE PLACE, ST. PAUL MN 55104 |
| James W Bracke |
director |
15411 MASON POINTE, EDEN PRAIRIE MN 55347 |
| Curt A Reynders |
officer: Chief Financial Officer |
11409 VALLEY VIEW ROAD, EDEN PRAIRIE MN 55344 |
| James D Hartman |
director |
|
| Richard W Kramp |
director |
174 STONEBRIDGE ROAD, ST. PAUL MN 55118 |
| Gary R Maharaj |
director |
9924 WEST 74TH STREET, EDEN PRAIRIE MN 55344 |
| Robert Irish |
director |
17910-39TH PLACE NORTH, PLYMOUTH MN 55446 |
| Daughton James Dr |
director, 10 percent owner, officer: Chief Technology Officer |
|
| Richard George |
officer: Chief Financial Officer |
|
| Wells Fargo & Company/mn |
10 percent owner |
420 MONTGOMERY STREET, SAN FRANCISCO CA 94163 |
| Partners Itasca |
10 percent owner |
3600 IDS CENTER, 80 SOUTH EIGHT ST, MINNEAPOLIS MN 55402 |
| Norwest Equity Partners Iv Lp /mn/ |
10 percent owner |
3600 IDS CENTER 80 SOUTH EIGHTH STREET, MINNEAPOLIS MN 554026 |
| Still George J Jr |
10 percent owner |
NORWEST VENTURE PARTNERS, 525 UNIVERSITY AVENUE, SUITE 800, PALO ALTO CA 94301 |
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