What is Xcel Energy 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, Xcel Energy's Probability of Financial Distress (%) is 0.06%.
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 Xcel Energy's Probability of Financial Distress (%)
For the Utilities - Regulated Electric subindustry, Xcel Energy'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.
Xcel Energy's Probability of Financial Distress (%) Distribution in the Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, Xcel Energy's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Xcel Energy's Probability of Financial Distress (%) falls into.
Xcel Energy 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 |
| = | -7.38 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.06% |
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).
Xcel Energy (Xcel Energy) Business Description
Traded in Other Exchanges
Address
414 Nicollet Mall, Minneapolis, MN, USA, 55401
Xcel Energy manages utilities serving 3.8 million electric customers and 2.1 million natural gas customers in eight states. Its utilities are Northern States Power, which serves customers in Minnesota, North Dakota, South Dakota, Wisconsin, and Michigan; Public Service Company of Colorado; and Southwestern Public Service Company, which serves customers in Texas and New Mexico. It is one of the largest renewable energy owners and suppliers in the U.S. with more than half of its electricity sales coming from carbon-free energy.
Executives
| Robert Frenzel |
director, officer: Chairman, President and CEO |
414 NICOLLET MALL, MINNEAPOLIS MN 55401 |
| Amanda J Rome |
officer: EVP, Group President Utilities |
414 NICOLLET MALL, MINNEAPOLIS MN 55401 |
| Timothy A Welsh |
director |
800 NICOLLET MALL, MINNEAPOLIS MN 55402 |
| Netha N. Johnson |
director |
3489 CRESTMOOR DRIVE, WOODBURY MN 55125 |
| Patricia L Kampling |
director |
PO BOX 2568, MADISON WI 53701 |
| Megan D Burkhart |
director |
1717 MAIN STREET, DALLAS TX 75201 |
| George J Kehl |
director |
414 NICOLLET MALL, MINNEAPOLIS MN 55401 |
| James T Prokopanko |
director |
25990 BIRCH BLUFF ROAD, EXCELSIOR MN 55331 |
| Lynn Casey |
director |
414 NICOLLET MALL, MINNEAPOLIS MN 55401 |
| Kim Williams |
director |
C/O WEYERHAEUSER COMPANY, 220 OCCIDENTAL AVENUE SOUTH, SEATTLE WA 98104 |
| Richard T Obrien |
director |
6363 SOUTH FIDDLERS GREEN CIRCLE, GREENWOOD VILLAGE CO 80111 |
| Charles G Pardee |
director |
10 SOUTH DEARBORN STREET, 54TH FLOOR, CHICAGO IL 60603 |
| Daniel Yohannes |
director |
414 NICOLLET MALL, MINNEAPOLIS MN 55014 |
| Christopher J. Policinski |
director |
4001 LEXINGTON AVENUE N., ARDEN HILLS MN 55126 |
| Brett C Carter |
officer: EVP, Group President Utilitie, other: Chief Customer Officer |
414 NICOLLET MALL, 401-9, MINNEAPOLIS MN 55401 |
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