Bisalloy Steel Group (ASX:BIS) Probability of Financial Distress (%) : 0.00% (As of Apr. 29, 2024)

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What is Bisalloy Steel Group Probability of Financial Distress (%)?

Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, Bisalloy Steel Group's Probability of Financial Distress (%) is 0.00%.

Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.

Competitive Comparison of Bisalloy Steel Group's Probability of Financial Distress (%)

For the Steel subindustry, Bisalloy Steel Group's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) 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.

Bisalloy Steel Group's Probability of Financial Distress (%) Distribution in the Steel Industry

For the Steel industry and Basic Materials sector, Bisalloy Steel Group's Probability of Financial Distress (%) distribution charts can be found below:

* The bar in red indicates where Bisalloy Steel Group's Probability of Financial Distress (%) falls into.

Bisalloy Steel Group Probability of Financial Distress (%) Calculation

Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.

The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:

LPFD

-20.12 * NIMTAAVG

1.60 * TLMTA

7.88 * EXRETAVG

1.55 * SIGMA

0.005 * RSIZE

2.27 * CASHMTA

0.070 * MB

0.09 * PRICE

8.87

-10.21

The Probability of Financial Distress (%) (PFD) was then obtianed by:

PFD	=	1	/	(1 + e^(-LPFD))	*	100%
	=	0.00%

The eight explanatory variables are:

1. NIMTAAVG = Net Income to Market Total Assets

NIMTAAVG	=	Net Income	/	Market Total Assets
	=	Net Income	/	(Market Cap + Total Liabilities)

*Note that for companies reported quarterly, geometrically declining weighted quarterly Net Income data in latest four quarters are used.

2. TLMTA = Total liabilities to Market Total Assets

TLMTA

Total Liabilities

Market Total Assets

3. CASHMTA = Cash to Market Total Assets

For non-financial companies, CASHMTA is measured as:

CASHMTA

Cash, Cash Equivalents, Marketable Securities

Market Total Assets

4. EXRETAVG = Excess Return compared to the S&P 500

EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.

5. SIGMA = Standard Deviation of Daily Returns

For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).

6. RSIZE = Relative Size

RSIZE

log (Market Cap

Total Market Cap of S&P 500 companies)

7. MB = Market to Adjusted Book Equity Ratio

MB	=	Market Cap	/	Adjusted Book Equity
	=	Market Cap	/	(Total Stockholders Equity + 0.1 * ( Market Cap - Total Stockholders Equity))

8. PRICE

PRICE is measured as the log of the stock price, capped at log(15).

Bisalloy Steel Group (ASX:BIS) Probability of Financial Distress (%) Explanation

Like the Altman Z-Score, the PFD measures a company's bankruptcy risk in the upcoming year. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.

Bisalloy Steel Group Probability of Financial Distress (%) Related Terms

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Bisalloy Steel Group (ASX:BIS) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Steel » Bisalloy Steel Group Ltd (ASX:BIS) » Definitions » Probability of Financial Distress (%)

Comparable Companies

Traded in Other Exchanges

N/A

Address

18 Resolution Drive, Unanderra, Wollongong, NSW, AUS, 2526

Website

https://www.bisalloy.com.au

Bisalloy Steel Group Ltd is engaged in the processing and sale of quenched and tempered high-tensile, and abrasion-resistant steel plates. The company is organized into geographical operating segments, being Australian Operations is engaged in the distribution of wear-grade and high tensile plates through distributors and directly to original equipment manufacturers in both Australia and Overseas. Its Overseas Operations engage in the distribution of the abrasion-resistant plate as well as other steel plate products. The Overseas Operations also focus on the marketing and distribution of quench and tempered steel plates. The majority of its revenue is derived from Australian Operations. The company's products are marketed under the BISALLOY brand name.