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Peerless Systems Corporation (NAS:PRLS)
Altman Z-Score
12.02 (As of Today)

Peerless Systems Corporation has a Z-score of 11.92, 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.

PRLS' s 10-Year Altman Z-Score Range
Min: -2.89   Max: 23.83
Current: 12.02

-2.89
23.83

During the past 13 years, Peerless Systems Corporation's highest Altman Z-Score was 23.83. The lowest was -2.89. And the median was 5.67.


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.

Peerless Systems Corporation'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*0.9725+1.4*0.4682+3.3*-0.0104+0.6*16.4038+1.0*0.2926
=11.92

* 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 Oct. 2013:
Total Assets was $13.03 Mil.
Total Current Assets was $13.03 Mil.
Total Current Liabilities was $0.35 Mil.
Retained Earnings was $6.10 Mil.
Pretax Income was -0.261 + -0.565 + 0.221 + 0.469 = $-0.14 Mil.
Interest Expense was 0 + 0 + 0 + 0 = $0.00 Mil.
Revenue was 0.92 + 0.847 + 1.101 + 0.946 = $3.81 Mil.
Market Capitalization (Today) was $10.40 Mil.
Total Liabilities was $0.63 Mil.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(13.027 - 0.352)/13.033
=0.9725

X2=Retained Earnings/Total Assets
=6.102/13.033
=0.4682

X3=Earnings Before Interest and Taxes/Total Assets
=(Pretax Income + Interest Expense)/Total Assets
=(-0.136 + 0)/13.033
=-0.0104

X4=Market Value Equity/Book Value of Total Liabilities
=Market Capitalization/Total Liabilities
=10.400/0.634
=16.4038

X5=Revenue/Total Assets
=3.814/13.033
=0.2926

The zones of discrimination were as such:

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

Peerless Systems Corporation has a Z-score of 11.92 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.

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.

Peerless Systems Corporation Annual Data

Jan04Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13
X1 0.46810.37990.5550.67480.83530.89010.94290.91810.89910.9594
X2 -1.9389-3.4189-1.9429-1.5101-0.7671-0.1525-0.01130.240.26440.4761
X3 -0.2157-0.44710.21660.14020.15580.4560.20860.47430.11910.062
X4 5.29133.392514.89525.83837.93074.580610.69954.16353.98412.7892
X5 1.3081.82481.80481.41450.85590.20150.08590.42340.19870.1791
Z-score 1.62-1.959.404.086.065.318.315.924.439.88
Zones Distress” ZonesDistress” ZonesSafe ZonesSafe ZonesSafe ZonesSafe ZonesSafe ZonesSafe ZonesSafe ZonesSafe Zones

Peerless Systems Corporation Quarterly Data

Jul11Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13
X1 0.960.97150.89910.94950.97060.96840.95940.96120.96870.9725
X2 0.25620.29050.26440.31160.33360.46290.47610.47750.47890.4682
X3 0.13380.12990.11910.13590.13920.06420.06210.02470.0188-0.0104
X4 5.86236.20693.9845.52936.472516.927912.789212.548115.584916.7991
X5 0.45670.29070.19870.14720.17340.16580.17910.21050.25410.2926
Z-score 5.936.024.435.496.1512.349.889.6411.5012.16
Zones Safe ZonesSafe ZonesSafe ZonesSafe ZonesSafe ZonesSafe ZonesSafe ZonesSafe ZonesSafe ZonesSafe Zones
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