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Brady (BRC) Probability of Financial Distress (%) : 0.02% (As of Dec. 13, 2024)


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What is Brady 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, Brady'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 of Brady's Probability of Financial Distress (%)

For the Security & Protection Services subindustry, Brady'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.


Brady's Probability of Financial Distress (%) Distribution in the Business Services Industry

For the Business Services industry and Industrials sector, Brady's Probability of Financial Distress (%) distribution charts can be found below:

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



Brady 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
=-8.64

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).


Brady  (NYSE:BRC) 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.


Brady Probability of Financial Distress (%) Related Terms

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Brady Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Industrials » Business Services » Brady Corp (NYSE:BRC) » Definitions » Probability of Financial Distress (%)
Traded in Other Exchanges
Address
6555 West Good Hope Road, Milwaukee, WI, USA, 53223
Brady Corp provides identification solutions and workplace safety products. The company offers identification and healthcare products that are sold under the Brady brand to maintenance, repair, and operations as well as original equipment manufacturing customers. Products include safety signs and labeling systems, material identification systems, wire identification, patient identification, and people identification. Brady also provides workplace safety and compliance products such as safety and compliance signs, asset tracking labels, and first-aid products. The company is organized and managed on a geographic basis with two reportable segments: Americas & Asia which derives maximum revenue, and Europe & Australia.
Executives
Brett Wilms officer: President - EMEA & Australia 6555 W GOOD HOPE ROAD, MILWAUKEE WI 53223
Russell Shaller director 6555 WEST GOOD HOPE RD, MILWAUKEE WI 53223
Andrew Gorman officer: General Counsel&Corp Secretary 6555 WEST GOOD HOPE ROAD, MILWAUKEE WI 53223
Nancy Lee Gioia director 6555 WEST GOOD HOPE RD., MILWAUKEE WI 53223
Elizabeth P Pungello director 6555 WEST GOOD HOPE RD., MILWAUKEE WI 53223
Bentley Curran officer: VP Chief Information Officer 6555 WEST GOOD HOPE ROAD, MILWAUKEE WI 53223
Olivier Bojarski officer: President, Identification Soln C/O BELDEN INC., 1 N. BRENTWOOD BOULEVARD, 15TH FLOOR, SAINT LOUIS MO 63105
Frank W Harris director 244 SUMMER ST POLYMER BLDG 603, AKRON OH 53202
Smee Joanne Collins director XEROX CORPORATION, 201 MERRITT 7, NORWALK CT 06851
Vineet A Nargolwala director 529 PLEASANT STREET, MAIL STATION B-1, ATTLEBORO MA 02703
Pascal Deman officer: VP & GM Workplace Safety 6555 WEST GOOD HOPE ROAD, MILWAUKEE WI 53223
Thomas J Felmer officer: SR VP CFO 6555 WEST GOOD HOPE ROAD, MILWAUKEE WI 53223
Louis T Bolognini officer: SR VP - GENERAL COUNSEL P O BOX 9, SUGAR LAND TX 77487
J Michael Nauman director, officer: President & CEO C/O MOLEX INCORPORATED, 2222 WELLINGTON COURT, LISLE IL 60532
Bradley C Richardson director