GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Cannapharmarx Inc (OTCPK:CPMD) » Definitions » Probability of Financial Distress (%)

CPMD (Cannapharmarx) Probability of Financial Distress (%) : 15.08% (As of Jun. 19, 2025)


View and export this data going back to 1999. Start your Free Trial

What is Cannapharmarx 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, Cannapharmarx's Probability of Financial Distress (%) is 15.08%.

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 Cannapharmarx's Probability of Financial Distress (%)

For the Drug Manufacturers - Specialty & Generic subindustry, Cannapharmarx'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.


Cannapharmarx's Probability of Financial Distress (%) Distribution in the Drug Manufacturers Industry

For the Drug Manufacturers industry and Healthcare sector, Cannapharmarx's Probability of Financial Distress (%) distribution charts can be found below:

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


;
;

Cannapharmarx 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
=-1.73

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

PFD=1/(1 + e^(-LPFD))*100%
=15.08%

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).


Cannapharmarx  (OTCPK:CPMD) 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.


Cannapharmarx Probability of Financial Distress (%) Related Terms

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


Cannapharmarx Business Description

Industry
Traded in Other Exchanges
N/A
Address
3204-Rideau Place SW, Suite 302, Calgary, AB, CAN, T2S 1Z2
Cannapharmarx Inc specializes in the acquisition, development, and operation of cannabis cultivation facilities in Canada. The group evolved to focus on producing medical cannabis and craft products. Its products Unique Genetics, Craft Products, and Medical Cannabis.
Executives
Anthony Michael Panek director 95 SOUTH STATE STREET, SUITE 2300, SALT LAKE CITY UT 84111
Dominic Colvin director, officer: Chief Executive Officer C/O CANNAPHARMARX, INC., 2 PARK PLAZA, SUITE 1200-B, IRVINE CA 92614
John Hamilton Cassels officer: Chief Financial Officer SUITE 500, 209 8TH AVENUE SW, CALGARY A0 T2P 1B8
Richard Dale Orman director 302, 3204 RIDEAU PLACE SW, CALGARY A0 T2S1Z2
Andrew Clifford Steedman officer: Chief Operating Officer 1131 RIVERDALE AVE SW, CALGARY A0 T2S 0Y9
Marc R Branson director 977 KEITH ROAD, WEST VANCOUVER A1 V7T 1M6
Gary J Herick 10 percent owner 7609 RALSTON ROAD, ARVADA CO 80002
James F Samuelson director PO BOX 22, NEWPORT BEACH CA 92662
Matthew Nicosia director, 10 percent owner 2 PARK PLAZA, SUITE 400, IRVINE CA 92614
Robert M Liess director 2602 W. SAM ALLEN RD., PLANT CITY FL 33565
Mathew D Sherwood director P.O. BOX 4375, DILLON CO 80435
James E Smeeding director 4029 GILBERT AVENUE, DALLAS TX 75219
Elie M Khalife director 9447 E. CROSS CREEK STREET, WICHITA KS 67206
Steven J Rule director C/O CANNAPHARMARX, INC., ONE COLLINS DRIVE, SUITE 100, CARNEYS POINT NJ 08069
Alexander R Giaquinto director 120 MOUNTAIN VIEW BOULEVARD, BASKING RIDGE NJ 07920