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MDGL (Madrigal Pharmaceuticals) Probability of Financial Distress (%) : 0.04% (As of Dec. 14, 2024)


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What is Madrigal Pharmaceuticals 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, Madrigal Pharmaceuticals's Probability of Financial Distress (%) is 0.04%.

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 Madrigal Pharmaceuticals's Probability of Financial Distress (%)

For the Biotechnology subindustry, Madrigal Pharmaceuticals'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.


Madrigal Pharmaceuticals's Probability of Financial Distress (%) Distribution in the Biotechnology Industry

For the Biotechnology industry and Healthcare sector, Madrigal Pharmaceuticals's Probability of Financial Distress (%) distribution charts can be found below:

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



Madrigal Pharmaceuticals 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
=-7.73

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

PFD=1/(1 + e^(-LPFD))*100%
=0.04%

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).


Madrigal Pharmaceuticals  (NAS:MDGL) 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.


Madrigal Pharmaceuticals Probability of Financial Distress (%) Related Terms

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Madrigal Pharmaceuticals Business Description

Industry
Traded in Other Exchanges
Address
200 Barr Harbor Drive, Suite 200, Four Tower Bridge, West Conshohocken, PA, USA, 19428
Madrigal Pharmaceuticals Inc is a clinical-stage biopharmaceutical company. It focuses on the development and commercialization of therapeutic candidates for the treatment of cardiovascular-metabolic diseases and non-alcoholic steatohepatitis (NASH). The product portfolio of the company includes MGL-3196, an orally administered, small-molecule liver-directed B-selective THR agonist, which is used for the treatment of non-alcoholic steatohepatitis and familial hypercholesterolemia. Also, MGL-3196 reduces triglycerides in the plasma and liver by increasing fat metabolism and shows an anti-diabetic action.
Executives
Fred B Craves director, 10 percent owner 750 BATTERY ST, STE 600, SAN FRANCISCO CA 94111
Richard S Levy director 860 WASHINGTON STREET, 3RD FLOOR, NEW YORK NY 10014
William John Sibold director, officer: President and CEO C/O MADRIGAL PHARMACEUTICALS, INC., FOUR, TOWER BRIDGE, 200 BARR HARBOR DR STE 200, WEST CONSHOHOCKEN PA 19428
Robert E. Waltermire officer: Senior VP, Chief Pharma Dev. FOUR TOWER BRIDGE, 200 BARR HARBOR DRIVE, SUITE 200, WEST CONSHOHOCKEN PA 19428
Paul A Friedman director, officer: Chief Executive Officer C/O INCYTE CORPORATION, 1801 AUGUSTINE CUT-OFF, WILMINGTON DE 19803
Rebecca Taub director, officer: Chief Medical Officer, EVP R&D 750 BATTERY STREET, SUITE 330, SAN FRANCISCO CA 94111
James M Daly director INCYTE CORPORATION EXPERIMENTAL STATION, RTE 141 & HENRY CLAY RD. BLDG E336, WILMINGTON DE 19880
Kenneth Bate director C/O MILLENNIUM PHARMACEUTICALS INC, 40 LANDSDOWNE STREET, CAMBRIDGE MA 02139
Baker Bros. Advisors Lp director 860 WASHINGTON STREET, 3RD FLOOR, NEW YORK NY 10014
Brian Joseph Lynch officer: SVP and General Counsel 480 MORRIS ROAD, BLUE BELL PA 19422
Felix Baker director BAKER BROS. ADVISORS LP, 860 WASHINGTON STREET 3RD FLOOR, NEW YORK NY 10014
Raymond Cheong director 860 WASHINGTON STREET, 3RD FLOOR, NEW YORK NY 10014
Julian Baker director BAKER BROS. ADVISORS LP, 860 WASHINGTON STREET 3RD FLOOR, NEW YORK NY 10014
Baker Brothers Life Sciences Lp director 860 WASHINGTON STREET, 3RD FLOOR, NEW YORK NY 10014
L.p. 667, director 860 WASHINGTON STREET, 3RD FLOOR, NEW YORK NY 10014