Switch to:
Accenture PLC (NYSE:ACN)
Altman Z-Score
8.09 (As of Today)

Accenture PLC has a Z-score of 8.09, indicating it is in Safe Zones. This implies the Z-Score is strong.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

ACN' s Altman Z-Score Range Over the Past 10 Years
Min: 4.77   Max: 6.96
Current: 6.96

4.77
6.96

During the past 13 years, Accenture PLC's highest Altman Z-Score was 6.96. The lowest was 4.77. And the median was 5.19.

Definition

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

Accenture PLC's Altman Z-Score for today is calculated with this formula:

 Z = 1.2 * X1 + 1.4 * X2 + 3.3 * X3 + 0.6 * X4 + 1.0 * X5 = 1.2 * 0.1779 + 1.4 * 0.7863 + 3.3 * 0.2732 + 0.6 * 6.8251 + 1.0 * 1.7819 = 8.09

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Trailing Twelve Months (TTM) ended in May. 2016:
Total Assets was \$19,191 Mil.
Total Current Assets was \$11,576 Mil.
Total Current Liabilities was \$8,161 Mil.
Retained Earnings was \$15,091 Mil.
Pretax Income was 1293.704 + 1622.592 + 1228.363 + 1081.461 = \$5,226 Mil.
Interest Expense was -3.711 + -4.543 + -4.052 + -3.832 = \$-16 Mil.
Revenue was 8969.044 + 8397.053 + 8465.984 + 8364.511 = \$34,197 Mil.
Market Capitalization (Today) was \$82,336 Mil.
Total Liabilities was \$12,064 Mil.

 X1 = Working Capital / Total Assets = (Total Current Assets - Total Current Liabilities) / Total Assets = (11576.011 - 8161.133) / 19191.047 = 0.1779

 X2 = Retained Earnings / Total Assets = 15090.815 / 19191.047 = 0.7863

 X3 = Earnings Before Interest and Taxes / Total Assets = (Pretax Income + Interest Expense) / Total Assets = (5226.12 + -16.138) / 19191.047 = 0.2732

 X4 = Market Value Equity / Book Value of Total Liabilities = Market Capitalization / Total Liabilities = 82336.140 / 12063.722 = 6.8251

 X5 = Revenue / Total Assets = 34196.592 / 19191.047 = 1.7819

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

Accenture PLC has a Z-score of 8.09 indicating it is in Safe Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.

Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firms assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firms assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firms assets.

Be Aware

Z score does not apply to financial companies.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Accenture PLC Annual Data

 Aug07 Aug08 Aug09 Aug10 Aug11 Aug12 Aug13 Aug14 Aug15 Aug16 X1 0.0938 0.1864 0.2317 0.2334 0.2266 0.2687 0.2184 0.2089 0.1668 0.1503 X2 0.2198 0.2517 0.3263 0.3611 0.3993 0.4743 0.597 0.6558 0.7374 0.3824 X3 0.246 0.2525 0.2196 0.2282 0.2242 0.2352 0.2581 0.2407 0.2423 0.2727 X4 3.609 3.0678 2.5109 2.5256 3.1234 3.3298 4.0434 4.3629 5.0509 5.661 X5 1.9961 2.0417 1.8906 1.7993 1.7387 1.7868 1.802 1.7777 1.8019 1.6885 Z-score 5.39 5.29 4.86 4.85 5.18 5.55 6.18 6.36 6.86 6.70 Zones Safe Zones Safe Zones Safe Zones Safe Zones Safe Zones Safe Zones Safe Zones Safe Zones Safe Zones Safe Zones

Accenture PLC Quarterly Data

 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 X1 0.2069 0.2089 0.1951 0.2068 0.1838 0.1668 0.1195 0.1711 0.1779 0.1503 X2 0.6508 0.6558 0.6766 0.7424 0.7361 0.7374 0.7548 0.8219 0.7863 0.3824 X3 0.2464 0.2407 0.2509 0.2635 0.2561 0.2423 0.248 0.28 0.2732 0.2727 X4 4.7165 4.3629 4.6472 5.3466 5.4822 5.0509 5.75 5.7194 6.3582 5.661 X5 1.8311 1.7777 1.8388 1.9293 1.896 1.8019 1.836 1.8461 1.7819 1.6885 Z-score 6.63 6.36 6.64 7.29 7.28 6.86 7.30 7.56 7.81 6.70 Zones Safe Zones Safe Zones Safe Zones Safe Zones Safe Zones Safe Zones Safe Zones Safe Zones Safe Zones Safe Zones
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to \$400 per referral. ( Learn More)