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AeroVironment (NAS:AVAV) Probability of Financial Distress (%)

: 0.02% (As of Today)
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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, AeroVironment's Probability of Financial Distress (%) is 0.02%.

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

For the Aerospace & Defense subindustry, AeroVironment'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.

   

AeroVironment Probability of Financial Distress (%) Distribution

For the Aerospace & Defense industry and Industrials sector, AeroVironment's Probability of Financial Distress (%) distribution charts can be found below:

* The bar in red indicates where AeroVironment's Probability of Financial Distress (%) falls in comparison to its industry or sector. The grey bar indicates the Probability of Financial Distress (%)'s extreme value range as defined by GuruFocus.



AeroVironment 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
=-8.41

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

PFD=1/(1 + e^(-LPFD))*100%
=0.02%

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


8. PRICE

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


AeroVironment  (NAS:AVAV) 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.


AeroVironment Probability of Financial Distress (%) Related Terms

Thank you for viewing the detailed overview of AeroVironment's Probability of Financial Distress (%) provided by GuruFocus.com. Please click on the following links to see related term pages.


AeroVironment (NAS:AVAV) Business Description

AeroVironment logo
Industry
Traded in Other Exchanges
Address
241 18th Street South, Suite 415, Arlington, VA, USA, 22202
AeroVironment Inc operates under a single business segment in which it supplies unmanned aircraft systems, tactical missile systems, high-altitude pseudo-satellites, and other related services to government agencies within the United States Department of Defense as well as the United States' allied international governments. The systems can help with security, surveillance, or sensing, and provide "eyes in the sky" without needing an actual person, or driver, in the sky.
Executives
Cindy Kay Lewis director 900 INNOVATORS WAY, SIMI VALLEY CA 93065
Kevin Patrick Mcdonnell officer: Chief Financial Officer 900 INNOVATORS WAY, SIMI VALLEY CA 93065
Brian Charles Shackley officer: Interim CFO 900 INNOVATORS WAY, SIMI VALLEY CA 93065
Alison Marie Roelke officer: VP People & Culture 900 INNOVATORS WAY, SIMI VALLEY CA 93065
Melissa Ann Brown officer: VP, Gen. Counsel, Corp. Sec. 800 ROYAL OAKS DRIVE, SUITE 210, MONROVIA CA 91016
Kirk J. Flittie officer: VP & General Manager of UAS 800 ROYAL OAKS DR. #210, MONROVIA CA 91016
Kenneth D. Karklin officer: VP & General Manager of EES 800 ROYAL OAKS DR. #210, MONROVIA CA 91016
Catharine Merigold director C/O AEROVIRONMENT, INC., 900 INNOVATORS WAY, SIMI VALLEY CA 93065
Raymond D Cook officer: SVP and CFO C/O AEROVIRONMENT, INC., 900 INNOVATORS WAY, SIMI VALLEY CA 93065
Teresa Covington officer: VP, Interim CFO C/O AEROVIRONMENT, INC., 181 W. HUNTINGTON DR., SUITE 202, MONROVIA CA 91016
Douglas E Scott officer: SVP and General Counsel C/O AEROVIRONMENT, INC., 900 INNOVATORS WAY, SIMI VALLEY CA 93065
Charles Thomas Burbage director C/O AEROVIRONMENT, INC., 900 INNOVATORS WAY, SIMI VALLEY CA 93065
Edward R Muller director C/O AEROVIRONMENT, INC., 900 INNOVATORS WAY, SIMI VALLEY CA 93065
Stephen F Page director C/O AEROVIRONMENT, INC., 900 INNOVATORS WAY, SIMI VALLEY CA 93065
Roy E. Minson officer: SVP and GM C/O AEROVIRONMENT, INC., 181 W. HUNTINGTON DR., SUITE 202, MONROVIA CA 91016

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