Compass Diversified Holdings (Compass Diversified Holdings) Altman Z-Score

Compass Diversified Holdings Annual Data
	Trend	Dec14	Dec15	Dec16	Dec17	Dec18	Dec19	Dec20	Dec21	Dec22	Dec23
Altman Z-Score							2.08	1.30	1.42	1.07	1.37

Compass Diversified Holdings Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Altman Z-Score																1.07	1.18	1.21	1.13	1.37

For the Conglomerates subindustry, Compass Diversified Holdings'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.

For the Conglomerates industry and Industrials sector, Compass Diversified Holdings's Altman Z-Score distribution charts can be found below:

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

Compass Diversified Holdings 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.

Compass Diversified Holdings's Altman Z-Score for today is calculated with this formula:

* 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 Dec. 2023:
Total Assets was $3,817 Mil.
Total Current Assets was $1,604 Mil.
Total Current Liabilities was $312 Mil.
Retained Earnings was $-249 Mil.
Pre-Tax Income was -58.492 + 0.913 + 17.335 + 22.839 = $-17 Mil.
Interest Expense was -24.777 + -27.56 + -26.615 + -25.695 = $-105 Mil.
Revenue was 422.924 + 569.565 + 524.159 + 542.228 = $2,059 Mil.
Market Cap (Today) was $1,719 Mil.
Total Liabilities was $2,298 Mil.

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

The zones of discrimination were as such:

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

Compass Diversified Holdings has a Altman Z-Score of 1.38 indicating it is in Distress Zones.

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

Compass Diversified Holdings  (NYSE:CODI) 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.

Compass Diversified Holdings Altman Z-Score Related Terms

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Compass Diversified Holdings (Compass Diversified Holdings) Business Description