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Nortek (Nortek) Altman Z-Score : 1.86 (As of May. 05, 2024)


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What is Nortek Altman Z-Score?

The Altman Z-Score is a model designed to predict the likelihood of a company going bankrupt within the next two years. Created by American finance professor Edward Altman in 1968, the model is specifically designed for publicly traded manufacturing companies with assets greater than $1 million.

Nortek has a Altman Z-Score of 1.86, indicating it is in Grey Zones. This implies that Nortek is in some kind of financial stress. If it is below 1.81, the company may face bankrupcy risk.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The historical rank and industry rank for Nortek's Altman Z-Score or its related term are showing as below:


Nortek Altman Z-Score Historical Data

The historical data trend for Nortek's Altman Z-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Nortek Altman Z-Score Chart

Nortek Annual Data
Trend Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15
Altman Z-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 1.42 1.89 1.76 1.67 1.55

Nortek Quarterly Data
Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16
Altman Z-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.72 1.61 1.55 1.65 1.73

Competitive Comparison of Nortek's Altman Z-Score

For the Building Materials subindustry, Nortek's Altman Z-Score, along with its competitors' market caps and Altman Z-Score 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.


Nortek's Altman Z-Score Distribution in the Building Materials Industry

For the Building Materials industry and Basic Materials sector, Nortek's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Nortek's Altman Z-Score falls into.



Nortek Altman Z-Score Calculation

Altman 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.

Nortek'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*0.1511+1.4*-0.0565+3.3*0.0573+0.6*0.6554+1.0*1.1718
=1.86

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Jun. 2016:
Total Assets was $2,175 Mil.
Total Current Assets was $843 Mil.
Total Current Liabilities was $514 Mil.
Retained Earnings was $-123 Mil.
Pre-Tax Income was 29.4 + 5.2 + 3.5 + -9.1 = $29 Mil.
Interest Expense was -23.4 + -23.7 + -24.6 + -24 = $-96 Mil.
Revenue was 685.1 + 613.9 + 631 + 618.5 = $2,549 Mil.
Market Cap (Today) was $1,402 Mil.
Total Liabilities was $2,139 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(842.5 - 513.8)/2174.9
=0.1511

X2=Retained Earnings/Total Assets
=-122.8/2174.9
=-0.0565

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(29 - -95.7)/2174.9
=0.0573

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=1401.880/2139
=0.6554

X5=Revenue/Total Assets
=2548.5/2174.9
=1.1718

The zones of discrimination were as such:

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

Nortek has a Altman Z-Score of 1.86 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.


Nortek  (NAS:NTK) Altman Z-Score 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

Altman Z-Score does not apply to financial companies.


Nortek Altman Z-Score Related Terms

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Nortek (Nortek) Business Description

Traded in Other Exchanges
N/A
Address
Nortek Inc was incorporated in Delaware. The Company and its wholly-owned subsidiaries are diversified manufacturers of innovative, branded residential and commercial building products. The Company operates within five reporting segments: the Residential Ventilation ("RESV") segment, the Technology Solutions ("TECH") segment, the Display Mount Solutions ("DMS") segment, the Residential Heating and Cooling ("RHC") segment, and the Custom & Engineered Solutions ("CES") segment. The Company manufactures and sells, primarily in the United States, Canada and Europe. The Company's Residential Ventilation Products segment manufactures and distributes room and whole house ventilation products and other products for the professional remodeling and replacement markets, residential new construction market and DIY market. The principal products of the segment, which are sold under the Broan, NuTone, Venmar, Best and Zephyr brand names, among others, are kitchen range hoods, exhaust fans (such as bath fans and fan, heater and light combination units), and indoor air quality products (such as air exchangers and heat or energy recovery ventilators). The Company's TECH segment manufactures and distributes a broad array of products designed to provide convenience and security for residential and certain commercial applications. The Company's DMS segment manufactures and distributes a broad array of innovative products designed with ergonomic features including wall mounts, carts, arms, desk mounts, workstations, and stands that attach to or support a variety of display devices such as notebook computers, computer monitors, and flat panel displays. The RHC segment principally manufactures and sells split-system and packaged air conditioners and heat pumps, air handlers, furnaces and related equipment, accessories, and parts for the residential replacement and new construction markets, as well as for certain commercial markets. The CES segment manufactures and sells custom-designed and engineered HVAC products and systems, primarily in North America, for non-residential applications that include healthcare and educational facilities, commercial buildings, manufacturing facilities, clean rooms, data centers, and government buildings. The Company is subject to numerous federal, state, local and foreign laws and regulations.
Executives
James B Hirshorn director C/O NORTEK, INC., 500 EXCHANGE STREET, PROVIDENCE RI 02903
Jeffrey Lee Mueller officer: Group President, AQH GENERAC POWER SYSTEMS, INC., S45 W29290 HWY. 59, WAUKESHA WI 53189
John T Coleman director C/O ROSETTA STONE 1919 NORTH LYNN STREET 7TH FLOOR ARLINGTON VA 22209
J David Smith director GMS INC., 100 CRESCENT CENTRE PARKWAY, SUITE 800, TUCKER GA 30084
Donald W. Reilly officer: VP, Corp. Controller and CAO C/O KVH INDUSTRIES, INC., 50 ENTERPRISE CENTER, MIDDLETOWN RI 02842
Michael Joseph Clarke director, officer: President and CEO C/O NORTEK, INC., 500 EXCHANGE STREET, PROVIDENCE RI 02903
Joseph Anthony Arcuri director C/O NEWELL RUBBERMAID INC., 3 GLENLAKE PARKWAY, ATLANTA GA 30328
Bennett Rosenthal director 2000 AVENUE OF THE STARS, 12TH FLOOR, LOS ANGELES CA 90067
Chris Mcwilton director MASTERCARD INTERNATIONAL, 2000 PURCHASE STREET, PURCHASE NY 10577-2509
Ares Partners Holdco Llc 10 percent owner 2000 AVENUE OF THE STARS, 12TH FLOOR, LOS ANGELES CA 90067
Ares Management Gp Llc 10 percent owner 2000 AVENUE OF THE STARS, 12TH FLOOR, LOS ANGELES CA 90067
Ares Holdings Inc. 10 percent owner 2000 AVENUE OF THE STARS, 12TH FLOOR, LOS ANGELES CA 90067
Ares Management Holdings L.p. 10 percent owner 2000 AVENUE OF THE STARS, 12TH FL, LOS ANGELES CA 90067
Ares Management Corp 10 percent owner 2000 AVE OF THE STARS, 12TH FLOOR, LOS ANGELES CA 90067
Acof Operating Manager Iii Llc 10 percent owner C/O ARES MANAGEMENT LLC, 2000 AVENUE OF THE STARS, 12TH FLOOR, LOS ANGELES CA 90067

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