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, Nivaka Fashions's Probability of Financial Distress (%) is 1.90%.
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.
Nivaka Fashions (BOM:542206) 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.
Nivaka Fashions Probability of Financial Distress (%) Related Terms
BOM:542206 vs RL, LEVI, VFC: Probability of Financial Distress (%) Comparison
For the Apparel Manufacturing subindustry, Nivaka Fashions'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.
Nivaka Fashions Probability of Financial Distress (%) vs Manufacturing - Apparel & Accessories Industry
For the Manufacturing - Apparel & Accessories industry and Consumer Cyclical sector, Nivaka Fashions's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Nivaka Fashions's Probability of Financial Distress (%) falls into.
Nivaka Fashions 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
=
-3.95
The Probability of Financial Distress (%) (PFD) was then obtianed by:
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).
What does a Probability of Financial Distress (%) of 1.90% mean?
Nivaka Fashions (BOM:542206) has a Probability of Financial Distress (%) of 1.90% as of Jul. 02, 2026.
Is Nivaka Fashions' Probability of Financial Distress (%) too high?
Nivaka Fashions' current Probability of Financial Distress (%) is 1.90%. Overall, Nivaka Fashions has a GF Score™ of 27/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Nivaka Fashions' Probability of Financial Distress (%) compare to RL and LEVI?
Nivaka Fashions' Probability of Financial Distress (%) of 1.90% can be compared against companies in the Manufacturing - Apparel & Accessories industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Probability of Financial Distress (%) for a Manufacturing - Apparel & Accessories company?
A good Probability of Financial Distress (%) depends on the Manufacturing - Apparel & Accessories industry context. However, Probability of Financial Distress (%) should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Probability of Financial Distress (%) mean?
A high Probability of Financial Distress (%) can signal that a stock is expensive relative to its fundamentals. Nivaka Fashions's current Probability of Financial Distress (%) is 1.90%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Nivaka Fashions stock overvalued right now?
Based on GuruFocus' analysis, Nivaka Fashions (BOM:542206) is currently considered Significantly Overvalued. The stock's GF Value™ is ₹0.05, compared to a current price of ₹0.89 — trading 1680% above its estimated fair value. The current Probability of Financial Distress (%) is 1.90%. Nivaka Fashions' overall GF Score™ is 27/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Probability of Financial Distress (%) calculated?
Probability of Financial Distress (%) is calculated from a company's financial statements. For Nivaka Fashions (BOM:542206), the current Probability of Financial Distress (%) is 1.90% as of Jul. 02, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Nivaka Fashions (BOM:542206) Overvalued in 2026?
Based on GuruFocus' analysis, Nivaka Fashions stock appears to be overvalued.
The current stock price of ₹0.89 is trading 1680% above its estimated GF Value™ of ₹0.05.
GuruFocus considers Nivaka Fashions to be Significantly Overvalued.
Key valuation signals for BOM:542206:
Probability of Financial Distress (%): 1.90%
GF Value™: ₹0.05 vs. price of ₹0.89 (1680% above fair value)
No single metric tells the full story. See the BOM:542206 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Nivaka Fashions Ltd is an Indian company engaged in retailing Indian ethnic wear through omni channels like offline retail stores and online e-commerce websites. The company owns the brand 'Ninecolours'. The company manufactures certain products in its own brand in the name of 'Ninecolours West', 'Nine colours Quirk' and 'Ninecolours Luxe'. The company offers products like sarees, lehengas, kurtis, suits and gowns for women; kurtas, sherwanis, jackets and kurta pyjamas for men and ethnic wear collections for children. The company also offers a range of jewellery and Home decors products like Bed sheets, Table tops, Wall art and Dewan sets. The company generates the majority of its revenue from the sale of products.
27GF Score
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