What is TransDigm 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, TransDigm Group's Probability of Financial Distress (%) is 0.04%.
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 TransDigm Group's Probability of Financial Distress (%)
For the Aerospace & Defense subindustry, TransDigm 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.
TransDigm Group's Probability of Financial Distress (%) Distribution in the Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, TransDigm Group's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where TransDigm Group's Probability of Financial Distress (%) falls into.
TransDigm 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 |
| = | -7.89 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.04% |
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).
TransDigm Group (TransDigm Group) Business Description
Traded in Other Exchanges
Address
1301 East 9th Street, Suite 3000, Cleveland, OH, USA, 44114
TransDigm manufactures and services a diverse set of components and parts for commercial and military aircraft. The firm organizes itself in three segments: a power and control segment, airframes, and a small nonaviation segment, which serves mostly off-road vehicles and mining equipment. It operates as an acquisitive holding company that focuses its portfolio on firms that make proprietary products with substantial aftermarket demand. TransDigm regularly employs financial leverage to amplify its operating results.
Executives
| Joel Reiss |
officer: Executive Vice President |
1301 E. 9TH STREET, SUITE 3000, CLEVELAND OH 44114 |
| W Nicholas Howley |
officer: Chief Executive Officer |
C/O TRANSDIGM INC., 1301 EAST NINTH STREET, SUITE 3710, CLEVELAND OH 44114 |
| Michael Lisman |
officer: Chief Financial Officer |
1301 EAST 9TH STREET, SUITE 3000, CLEVELAND OH 44114 |
| Robert J Small |
director |
|
| Sean P Hennessy |
director |
C/O THE SHERWIN WILLIAMS CO, 101 PROSPECT AVE NW, CLEVELAND OH 44115 |
| Jorge Valladares |
officer: Pres., Adel Wiggins Group |
ADELWIGGINS GROUP, 5000 TRIGGS STREET, LOS ANGELES CA 90022 |
| Sarah Wynne |
officer: Corporate Accounting Officer |
1301 EAST 9TH STREET, SUITE 3000, CLEVELAND OH 44114 |
| Kevin M Stein |
officer: COO - Power |
TRANSDIGM GROUP INCORPORATED, 1301 EAST 9TH STREET, SUITE 3000, CLEVELAND OH 44114 |
| Jessica L Warren |
officer: GC, CCO, Secretary |
1301 EAST NINTH STREET, SUITE 3000, CLEVELAND OH 44114 |
| Mervin Dunn |
director |
COMMERCIAL VEHICLE GROUP, INC., 6530 WEST CAMPUS WAY, NEW ALBANY OH 43054 |
| John Staer |
director |
C.F.MOLLERS ALLE 16, 8TV, 2300 COPENHAGEN S G7 DK |
| Jane M. Cronin |
director |
101 W. PROSPECT AVENUE, CLEVELAND OH 44115 |
| Raymond F Laubenthal |
officer: President and COO |
TRANSDIGM GROUP INCORPORATED, 1301 EAST 9TH STREET, SUITE 3710, CLEVELAND OH 44114 |
| Robert S Henderson |
officer: Exec.V.P. & Pres., AdelWiggins |
ADELWIGGINS GROUP, 5000 TRIGGS STREET, LOS ANGELES CA 90022 |
| Halle Fine Terrion |
officer: GC, CCO, Secretary |
1301 EAST 9TH STREET, SUITE 3000, CLEVELAND OH 44114 |
TransDigm Group (TransDigm Group) Headlines
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
TDG has been successfully added to your