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Kayne Anderson Energy Development Company (NYSE:KED)
Altman Z-Score
0.00 (As of Today)

Kayne Anderson Energy Development Company has a Z-score of 2.42, indicating it is in Grey Zones. This implies that Kayne Anderson Energy Development Company is in some kind of financial stress. If it is below 1.81, the company may faces bankrupcy risk.

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.

KED' s 10-Year Altman Z-Score Range
Min: 0   Max: 0
Current: 0


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.

Kayne Anderson Energy Development Company'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+1.4*0+3.3*0.0205+0.6*3.8601+1.0*0.0355
=2.42

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Trailing Twelve Months (TTM) ended in Feb. 2012:
Total Assets was $357.73 Mil.
Total Current Assets was $0.00 Mil.
Total Current Liabilities was $0.00 Mil.
Retained Earnings was $0.00 Mil.
Pretax Income was 0.877 + 1.033 + 0.518 + 2.915 = $5.34 Mil.
Interest Expense was -0.569 + -0.494 + -0.474 + -0.469 = $-2.01 Mil.
Revenue was 2.737 + 2.762 + 2.411 + 4.789 = $12.70 Mil.
Market Capitalization (Today) was $399.62 Mil.
Total Liabilities was $103.53 Mil.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(0 - 0)/357.728
=0

X2=Retained Earnings/Total Assets
=0/357.728
=0

X3=Earnings Before Interest and Taxes/Total Assets
=(Pretax Income - Interest Expense)/Total Assets
=(5.343 - -2.006)/357.728
=0.0205

X4=Market Value Equity/Book Value of Total Liabilities
=Market Capitalization/Total Liabilities
=399.621/103.526
=3.8601

X5=Revenue/Total Assets
=12.699/357.728
=0.0355

The zones of discrimination were as such:

Distress” Zones - 1.81 < “Grey” Zones < 2.99 - “Safe” Zones

Kayne Anderson Energy Development Company has a Z-score of 2.42 indicating it is in Grey 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.

Read more about Altman Z-score and the original research.


Be Aware

Z score does not apply to financial companies.


Related Terms

Total Assets, Total Current Assets, Total Current Liabilities, Retained Earnings, Pretax Income, Interest Expense, Revenue, Market Capitalization, Total Liabilities, Financial Strength


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Kayne Anderson Energy Development Company Annual Data

Nov07Nov08Nov09Nov10Nov11
X1 00000
X2 00000
X3 0.0155-0.00610.0136-0.0040.018
X4 00002.2664
X5 0.02530.00850.03110.01050.0339
Z-score 0.08-0.010.08-0.001.45
Zones Distress” ZonesDistress” ZonesDistress” ZonesDistress” ZonesDistress” Zones

Kayne Anderson Energy Development Company Quarterly Data

Nov09Feb10May10Aug10Nov10Feb11May11Aug11Nov11Feb12
X1 0000000000
X2 0000000000
X3 0.01360.01350.01460.0092-0.004-0.00370.00720.01080.0180.0205
X4 0002.7657002.06912.56452.26642.3577
X5 0.03110.02980.03170.02530.01050.01030.02140.02730.03390.0355
Z-score 0.080.070.081.72-0.00-0.001.291.601.451.52
Zones Distress” ZonesDistress” ZonesDistress” ZonesDistress” ZonesDistress” ZonesDistress” ZonesDistress” ZonesDistress” ZonesDistress” ZonesDistress” Zones
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