What is HNI 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, HNI's Probability of Financial Distress (%) is 0.03%.
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 HNI's Probability of Financial Distress (%)
For the Business Equipment & Supplies subindustry, HNI'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.
HNI's Probability of Financial Distress (%) Distribution in the Industrial Products Industry
For the Industrial Products industry and Industrials sector, HNI's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where HNI's Probability of Financial Distress (%) falls into.
HNI 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 |
| = | -8.20 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.03% |
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).
HNI (HNI) Business Description
Traded in Other Exchanges
Address
600 East Second Street, P.O. Box 1109, Muscatine, IA, USA, 52761-0071
HNI Corp is a provider of office furniture and hearth products. The company generates the bulk of its revenue from its workplace furnishing, which consists of panel-based and freestanding furniture systems, seating, storage, tables, and architectural products. These products are sold primarily through a national system of dealers, wholesalers, and office product distributors but also directly to end-user customers and federal, state, and local governments. Residential building products include a full array of gas, wood, electric, and pellet-fueled fireplaces, inserts, stoves, facings, and accessories. The company has operations in the United States, Canada, Mainland China, Hong Kong, India, Mexico, and Taiwan.
Executives
| Steven M Bradford |
officer: Sr. VP, Gen. Counsel & Sec. |
408 EAST SECOND STREET, MUSCATINE IA 52761 |
| Jeffrey D Lorenger |
officer: VP, Gen. Counsel and Secretary |
408 EAST SECOND STREET, PO BOX 1109, MUSCATINE IA 52761 |
| Vincent P Berger |
officer: President, Hearth & Home Tech |
7571 215TH STREET WEST, LAKEVILLE MN 55044 |
| Marshall H Bridges |
officer: VP and Chief Financial Officer |
408 EAST SECOND STREET, MUSCATINE IA 52761 |
| Michael J. Roch |
officer: CCO, WP & Health, Kimball Intl |
C/O KIMBALL INTERNATIONAL, INC., 1600 ROYAL STREET, JASPER IN 47546 |
| Gregory A Meunier |
officer: Ex VP GL Ops, Kimball Intl |
1600 ROYAL ST, JASPER IN 47546 |
| Kourtney L Smith |
officer: COO, Kimball International |
1600 ROYAL STREET, JASPER IN 47549 |
| Larry B Porcellato |
director |
ICI PAINTS, 15885 SPRAGUE ROAD, CLEVELAND OH 44136 |
| Patrick D Hallinan |
director |
FORTUNE BRANDS HOME & SECURITY, INC., 520 LAKE COOK ROAD, DEERFIELD IL 60015 |
| Radhakrishna S Rao |
officer: Chief Info and Digital Officer |
600 EAST SECOND STREET, MUSCTAINE IA 52761 |
| Ronald V Waters |
director |
75 EAST ELM STREET, CHICAGO IL 60611 |
| Miguel M Calado |
director |
3600 AMHERST, UNIVERSITY PARK, DALLAS TX 75225 |
| Kurt A Tjaden |
officer: SVP HNI; President HNI Intl |
408 EAST SECOND STREET, MUSCATINE IA 52761 |
| Jason Dean Hagedorn |
officer: President, Allsteel Inc. |
600 EAST SECOND STREET, MUSCATINE IA 52761 |
| Donna D Meade |
officer: VP, Member Relations |
408 EAST SECOND STREET, MUSCATINE IA 52761 |
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