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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, Babylon Holdings'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.
For the Health Information Services subindustry, Babylon Holdings'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.
For the Healthcare Providers & Services industry and Healthcare sector, Babylon Holdings's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Babylon Holdings's Probability of Financial Distress (%) falls into.
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 |
= | 0.00 |
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).
Babylon Holdings (OTCPK:BBLNF) 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.
Thank you for viewing the detailed overview of Babylon Holdings's Probability of Financial Distress (%) provided by GuruFocus.com. Please click on the following links to see related term pages.
Vnv Global Ab (publ) | 10 percent owner | MASTER SAMUELSGATAN 1, STOCKHOLM V7 111 44 |
Vnv (cyprus) Ltd | 10 percent owner | 1 LAMPOUSAS STREET, NICOSIA G4 1095 |
Ali Parsadoust | director, 10 percent owner, officer: Chief Executive Officer | C/O BABYLON HOLDINGS LTD., 1 KNIGHTSBRIDGE GREEN, LONDON X0 SW1X 7QA |
David James Humphreys | officer: Chief Financial Officer | C/O BABYLON HOLDINGS LIMITED, 2500 BEE CAVE ROAD, BUILDING 1 SUITE 400, AUSTIN TX 78746 |
Mairi Johnson | director | C/O BABYLON HOLDINGS LIMITED, 2500 BEE CAVE ROAD, BUILDING 1 SUITE 400, AUSTIN TX 78746 |
Brunner Aidan De | director | C/O BABYLON HOLDINGS LIMITED, 2500 BEE CAVE ROAD, BUILDING 1 SUITE 400, AUSTIN TX 78746 |
Eugene I Davis | director | 8540 GANDER CREEK DRIVE, MIAMISBURG OH 45342 |
Darshak Sanghavi | officer: Chief Medical Officer | C/O BABYLON HOLDINGS LIMITED, 2500 BEE CAVE ROAD, BUILDING 1 SUITE 400, AUSTIN TX 78746 |
David P Warren | director | C/O BABYLON HOLDINGS LIMITED, 2500 BEE CAVE ROAD, BUILDING 1 SUITE 400, AUSTIN TX 78746 |
Investment Fund Public | 10 percent owner | THE PUBLIC INVESTMENT FUND TOWER,, KING ABDULLAH FINANCIAL DISTRICT (KAFD), AL AQIQ DISTRICT, RIYADH T0 13519 |
Per Brilioth | director | C/O KISMET ACQUISITION ONE CORP, 9 BUILDING B, LESNAYA STREET, MOSCOW 1Z 125196 |
Paul-henri Ferrand | officer: Chief Operating Officer | C/O BABYLON HOLDINGS LIMITED, 2500 BEE CAVE ROAD, BUILDING 1 SUITE 400, AUSTIN TX 78746 |
Georgi Ganev | director | C/O BABYLON HOLDINGS LTD., 1 KNIGHTSBRIDGE GREEN, LONDON X0 SW1X 7QA |
Mohannad Alblehed | director | C/O PUBLIC INVESTMENT FUND, P.O.BOX 6847, RIYADH T0 11452 |
Ab (publ) Kinnevik | 10 percent owner | SKEPPSBRON 18, STOCKHOLM V7 SE-10313 |
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