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FTHY (FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND) Probability of Financial Distress (%) : 0.00% (As of Oct. 31, 2024)


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What is FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND 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, FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND'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.


Competitive Comparison of FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND's Probability of Financial Distress (%)

For the Asset Management subindustry, FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND'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.


FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND's Probability of Financial Distress (%) Distribution in the Asset Management Industry

For the Asset Management industry and Financial Services sector, FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND's Probability of Financial Distress (%) distribution charts can be found below:

* The bar in red indicates where FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND's Probability of Financial Distress (%) falls into.



FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND 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
=-10.03

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 banks, 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).


FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND  (NYSE:FTHY) 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.


FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND Probability of Financial Distress (%) Related Terms

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FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND Business Description

Traded in Other Exchanges
N/A
Address
120 East Liberty Drive, Suite 400, Wheaton, IL, USA, 60187
FIRST TRUST HIGH YIELD OPPORTUNITIES 2027 TERM FUND is a diversified, closed-end management investment company. The investment objective of the fund is to provide current income.
Executives
James A Bowen director, other: Officer - Investment Advisor C/O FIRST TRUST ADVISORS LP, 120 EAST LIBERTY DRIVE, SUITE 400, WHEATON IL 60187
David Mcgarel other: Officer - Investment Advisor C/O FIRST TRUST ADVISORS LP, 120 EAST LIBERTY DRIVE, SUITE 400, WHEATON IL 60187
Housey William A Jr other: Officer of Advisor, Port. Mgr. FIRST TRUST ADVISORS L.P., 120 E. LIBERTY DRIVE, SUITE 400, WHEATON IL 60187
Daniel J Lindquist officer: Vice President C/O FIRST TRUST ADVISORS L.P., 120 EAST LIBERTY DRIVE, SUITE 400, WHEATON IL 60187
Bronwyn Wright director FIRST TRUST ADVISORS L.P., 120 EAST LIBERTY DRIVE, SUITE 400, WHEATON IL 60187
M Keefe Denise director C/O FIRST TRUST ADVISORS L.P., 120 EAST LIBERTY DRIVE, SUITE 400, WHEATON IL 60187
Jeffrey M Scott other: Portfolio Manager FIRST TRUST ADVISORS L.P., 120 EAST LIBERTY DRIVE, SUITE 400, WHEATON IL 60187
Kelly Catherine Dehler other: Officer - Investment Advisor C/O FIRST TRUST ADVISORS L.P., 120 EAST LIBERTY DRIVE, SUITE 400, WHEATON IL 60187
Kristi A Maher officer: Asst. Secretary and CCO FIRST TRUST PORTFOLIOS L.P., 120 EAST LIBERTY DRIVE, SUITE 400, WHEATON IL 60187
Orlando Purpura other: Portfolio Manager FIRST TRUST ADVISORS L.P., 120 EAST LIBERTY DRIVE, SUITE 400, WHEATON IL 60187
Roger Testin other: Officer - Investment Advisor C/O FIRST TRUST ADVISORS LP, 120 EAST LIBERTY DRIVE, SUITE 400, WHEATON IL 60187
Andy Roggensack other: Officer - Investment Advisor C/O FIRST TRUST ADVISORS LP, 120 EAST LIBERTY DRIVE, SUITE 400, WHEATON IL 60187
W Scott Jardine officer: Secretary, other: Officer - Investment Advisor C/O FIRST TRUST ADVISORS LP, 120 EAST LIBERTY DRIVE, SUITE 400, WHEATON IL 60187
Scott Michael Friske other: Officer - Investment Advisor FIRST TRUST ADVISORS L.P., 120 EAST LIBERTY DRIVE, SUITE 400, WHEATON IL 60187
First Trust Advisors Lp other: Investment Advisor 120 EAST LIBERTY DRIVE, SUITE 400, WHEATON IL 60187

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