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SpringWorks Therapeutics (SpringWorks Therapeutics) Probability of Financial Distress (%) : 0.05% (As of May. 25, 2024)


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What is SpringWorks Therapeutics 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, SpringWorks Therapeutics'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 SpringWorks Therapeutics's Probability of Financial Distress (%)

For the Biotechnology subindustry, SpringWorks Therapeutics'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.


SpringWorks Therapeutics's Probability of Financial Distress (%) Distribution in the Biotechnology Industry

For the Biotechnology industry and Healthcare sector, SpringWorks Therapeutics's Probability of Financial Distress (%) distribution charts can be found below:

* The bar in red indicates where SpringWorks Therapeutics's Probability of Financial Distress (%) falls into.



SpringWorks Therapeutics 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
=-7.62

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


8. PRICE

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


SpringWorks Therapeutics  (NAS:SWTX) 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.


SpringWorks Therapeutics Probability of Financial Distress (%) Related Terms

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SpringWorks Therapeutics (SpringWorks Therapeutics) Business Description

Industry
Traded in Other Exchanges
N/A
Address
100 Washington Boulevard, Stamford, CT, USA, 06902
SpringWorks Therapeutics Inc is a clinical-stage biopharmaceutical company applying a precision medicine approach to acquiring, developing and commercializing life-changing medicines for underserved patient populations suffering from devastating rare diseases and cancer. The company has a differentiated portfolio of small molecule targeted oncology product candidates and is advancing two potentially registrational clinical trials in rare tumor types, as well as several other programs addressing highly prevalent, genetically defined cancers.
Executives
Tai-an Lin officer: Chief Scientific Officer C/O SPRINGWORKS THERAPEUTICS, INC., 100 WASHINGTON BOULEVARD, STAMFORD CT 06902
Julie Hambleton director C/O FIVE PRIME THERAPEUTICS, INC., TWO CORPORATE DRIVE, SOUTH SAN FRANCISCO CA 94080
Jeffrey Lawrence Schwartz director, 10 percent owner C/O BAIN CAPITAL LIFE SCIENCES, LP, 200 CLARENDON STRERET, BOSTON MA 02116
Daniel Pichl officer: Chief People Officer C/O SPRINGWORKS THERAPEUTICS, INC., 100 WASHINGTON BLVD., STAMFORD CT 06902
James Cassidy officer: Chief Medical Officer 368 NOD HILL ROAD, WILTON CT 06897
Orbimed Advisors Llc 10 percent owner 601 LEXINGTON AVENUE, 54TH FLOOR, NEW YORK NY 10022
Carlos Alban director 1 N. WAUKEGAN ROAD, NORTH CHICAGO IL 60064
Saqib Islam director, officer: Chief Executive Officer ALEXION PHARMACEUTICALS, 352 KNOTTER DRIVE, CHESHIRE CT 06410
L. Mary Smith officer: See Remarks C/O SPRINGWORKS THERAPEUTICS, INC., 100 WASHINGTON BLVD., STAMFORD CT 06902
Bain Capital Life Sciences Investors, Llc 10 percent owner 200 CLARENDON STREET, BOSTON MA 02116
Michael F. Burgess officer: Head of Research & Development C/O SYNLOGIC, INC., 301 BINNEY STREET, SUITE 402, CAMRIDGE MA 02142
Stephen P Squinto director, 10 percent owner C/O ALEXION PHARMACEUTICALS INC, 352 KNOTTER DRIVE, CHESHIRE CT 06410
Bhavesh Ashar officer: Chief Commercial Officer C/O SPRINGWORKS THERAPEUTICS, 100 WASHINGTON BLVD, STAMFORD CT 05902
Orbimed Capital Gp Vi Llc 10 percent owner 601 LEXINGTON AVENUE, 54TH FLOOR, NEW YORK NY 10022
Badreddin Edris officer: Chief Business Officer C/O SPRINGWORKS THERAPEUTICS, INC., 100 WASHINGTON BLVD., STAMFORD CT 06902

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