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Renrui Human Resources Technology Holdings (HKSE:06919) Probability of Financial Distress (%) : 0.02% (As of Dec. 14, 2024)


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What is Renrui Human Resources Technology Holdings 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, Renrui Human Resources Technology Holdings'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 Renrui Human Resources Technology Holdings's Probability of Financial Distress (%)

For the Staffing & Employment Services subindustry, Renrui Human Resources Technology Holdings'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.


Renrui Human Resources Technology Holdings's Probability of Financial Distress (%) Distribution in the Business Services Industry

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

* The bar in red indicates where Renrui Human Resources Technology Holdings's Probability of Financial Distress (%) falls into.



Renrui Human Resources Technology Holdings 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
=-8.32

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).


Renrui Human Resources Technology Holdings  (HKSE:06919) 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.


Renrui Human Resources Technology Holdings Probability of Financial Distress (%) Related Terms

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Renrui Human Resources Technology Holdings Business Description

Traded in Other Exchanges
N/A
Address
No. 688 Mid-Section Tianfu Avenue, No. 601, 602, 603, 6th Floor, Block 3, Chengdu High-tech Zone, Free Trade Pilot Zone, Sichuan, Chengdu, CHN
Renrui Human Resources Technology Holdings Ltd is a fast-growing Chinese HR company offering flexible staffing, Its segments include Comprehensive flexible staffing, and Professional recruitment, and other HR solutions. The company generates a majority of its revenue from the Comprehensive Flexible Staffing segment, which mainly includes general service outsourcing, digital technology and cloud services, digital operations, and customer services.
Executives
Wang Fen 2202 Interest of your spouse
Wu Qi 2202 Interest of your spouse
Zhang Feng 2103 Interests held jointly with another person
Zhang Jianguo 2103 Interests held jointly with another person
Zhang Jianmei 2103 Interests held jointly with another person
Chen Bin 2202 Interest of your spouse
Mak Siu Hang Viola 2201 Interest of corporation controlled by you
Vms Fin Services Holdings Limited 2201 Interest of corporation controlled by you
Vms Holdings Limited 2201 Interest of corporation controlled by you
Vms Strategic Investment Gp Limited 2201 Interest of corporation controlled by you
Vms Strategic Investment Fund, L.p. 2101 Beneficial owner
Ming Feng Holdings Limited 2101 Beneficial owner
Vms Auto Italia Fin Services Holdings Limited 2201 Interest of corporation controlled by you
Fidelity China Special Situations Plc 2101 Beneficial owner
Fil Limited 2201 Interest of corporation controlled by you

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