What is CTS 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, CTS's Probability of Financial Distress (%) is 0.01%.
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 CTS's Probability of Financial Distress (%)
For the Electronic Components subindustry, CTS'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.
CTS's Probability of Financial Distress (%) Distribution in the Hardware Industry
For the Hardware industry and Technology sector, CTS's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where CTS's Probability of Financial Distress (%) falls into.
CTS 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 |
| = | -8.81 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.01% |
The eight explanatory variables are:
1. NIMTAAVG = Net Income to Market Total Assets
*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
3. CASHMTA = Cash to Market Total Assets
For non-financial companies, CASHMTA is measured as:
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).
CTS (CTS) Business Description
Traded in Other Exchanges
Address
4925 Indiana Avenue, Lisle, IL, USA, 60532
CTS Corp operates in the electronics industry. The company is a global manufacturer of Sensors, Electronic components, and Actuators. It designs, manufactures, and sells a broad line of sensors, electronic components, and actuators mainly to original equipment manufacturers (OEM) for the aerospace and defense, industrial, information technology, medical, telecommunications, and transportation markets. Geographically, it derives a majority of its revenue from the United States and also has a presence in China; Singapore; the Czech Republic; Taiwan and other countries.
Executives
| Randy Lee Stone |
director |
974 CENTRE ROAD, CRP 730, WILMINGTON DE 19805 |
| Kieran M O'sullivan |
director, officer: President & CEO |
2375 CABOT DRIVE, LISLE IL 60532 |
| Martin Baumeister |
officer: Senior Vice President |
4925 INDIANA AVENUE, LISLE IL 60532 |
| Michael Edward Murray |
officer: Senior Vice President |
4925 INDIANA AVENUE, LISLE IL 60532 |
| Ye Jane Li |
director |
200 FLYNN ROAD, CAMARILLO CA 93012-8790 |
| Ashish Agrawal |
officer: CFO |
2375 CABOT DRIVE, LISLE IL 60525 |
| Thomas Michael White |
officer: Controller and PAO |
4925 INDIANA AVENUE, LISLE IL 60532 |
| Scott D'angelo |
officer: VP & Secretary |
4925 INDIANA AVENUE, LISLE IL 60532 |
| Donna Costello |
director |
17 STEWART COURT, WESTWOOD NJ 07675 |
| Alfonso G Zulueta |
director |
4925 INDIANA AVE, LISLE IL 60532 |
| Gordon Hunter |
director |
25950 ELENA RD, LOS ALTOS HILLS CA 94022 |
| Diana M Murphy |
director |
C/O LANDSTAR SYSTEM INC, 13410 SUTTON PARK DR S, JACKSONVILLE FL 32224 |
| William S Johnson |
director |
C/O CABOT MICROELECTRONICS, 870 N. COMMONS DR, AURORA IL 60504 |
| Luis Francisco Machado |
officer: VP, General Counsel & Sec. |
1142 W. BEARDSLEY AVENUE, ELKHART IN 46514 |
| Rajeeb K Nath |
officer: Vice President |
1142 WEST BEARDSLEY AVENUE, ELKHART IN 46514 |
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