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GNW (Genworth Financial) Probability of Financial Distress (%) : 0.06% (As of Dec. 11, 2024)


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What is Genworth Financial 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, Genworth Financial's Probability of Financial Distress (%) is 0.06%.

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 Genworth Financial's Probability of Financial Distress (%)

For the Insurance - Life subindustry, Genworth Financial'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.


Genworth Financial's Probability of Financial Distress (%) Distribution in the Insurance Industry

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

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



Genworth Financial 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
=-7.37

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

PFD=1/(1 + e^(-LPFD))*100%
=0.06%

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 insurance 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).


Genworth Financial  (NYSE:GNW) 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.


Genworth Financial Probability of Financial Distress (%) Related Terms

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Genworth Financial Business Description

Industry
Traded in Other Exchanges
Address
6620 West Broad Street, Richmond, VA, USA, 23230
Genworth Financial Inc is a diversified insurance holding company that provides various mortgage and life insurance products. The company has three main operating business segments: Enact, Life and Annuities segment and Long-Term Care Insurance. The company's product portfolio includes various financial products such as traditional life insurance, mortgage insurance, fixed annuities, and variable annuities. Majority of the revenue is generated by the Long-Term Care Insurance segment. The company earns maximum of its revenue in the United States.
Executives
Thomas J Mcinerney director, officer: President and CEO; Director 6620 WEST BROAD STREET, RICHMOND VA 23230
Cristina E. Ahn officer: VP and Controller C/O GENWORTH FINANCIAL, INC., 6620 WEST BROAD STREET, RICHMOND VA 23230
Kelly A Saltzgaber officer: EVP & Chief Investment Officer C/O GENWORTH FINANCIAL, INC., 6620 WEST BROAD STREET, RICHMOND VA 23230
Rohit Gupta officer: EVP?U.S. Mortgage Insurance C/O GENWORTH FINANCIAL, INC., 6620 WEST BROAD STREET, RICHMOND VA 23230
Sheehan Daniel J Iv officer: SVP - Chief Investment Officer 6620 WEST BROAD STREET, RICHMOND VA 23230
Andrea Lynn White officer: EVP-GR & Chief of Staff C/O GENWORTH FINANCIAL, INC., 6620 WEST BROAD STREET, RICHMOND VA 23230
Mark Blakeley Hodges officer: EVP and CRO C/O GENWORTH FINANCIAL, INC., 6620 WEST BROAD STREET, RICHMOND VA 23230
Elaine A Sarsynski director 312 FARMINGTON AVE, FARMINGTON CT 06032
Restrepo Robert P Jr director
Melissa Hagerman officer: EVP and Chief HR Officer C/O GENWORTH FINANCIAL, INC., 6620 WEST BROAD STREET, RICHMOND VA 23230
Gregory S. Karawan officer: EVP and General Counsel C/O GENWORTH FINANCIAL, INC., 6620 WEST BROAD STREET, RICHMOND VA 23230
Mills Howard D. Iii director C/O GENWORTH FINANCIAL, INC., 6620 WEST BROAD STREET, RICHMOND VA 23230
Jill R Goodman director 433 WEST VAN BUREN STREET, CHICAGO IL 60607
Ramsey D. Smith director C/O GENWORTH FINANCIAL, INC., 6620 WEST BROAD STREET, RICHMOND VA 23230
Karen Elizabeth Dyson director 21 RIVERSIDE DR., APT 601, COCOA FL 32922