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, Huron Consulting Group'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
For the Consulting Services subindustry, Huron Consulting Group'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.
Huron Consulting Group Probability of Financial Distress (%) Distribution
For the Business Services industry and Industrials sector, Huron Consulting Group's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Huron Consulting Group's Probability of Financial Distress (%) falls into.
Huron Consulting Group 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 |
| = | -7.80 |
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
*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).
Huron Consulting Group (Huron Consulting Group) Business Description
Traded in Other Exchanges
Address
550 West Van Buren Street, Chicago, IL, USA, 60607
Huron Consulting Group Inc is a professional services firm. The company provides expertise in strategy, technology, operations, advisory services, & analytics through three operating segments namely Healthcare, Education, and Business Advisory. Healthcare segment helps the firms to transform and innovate the delivery model to focus on patient wellness by improving quality outcomes, minimizing care variation and fundamentally improving patient and population health, Education segment provides management consulting and technology solutions, and Business Advisory segment provides services to large and middle-market organizations, not-for-profit organizations, and private equity firms. It generates a majority of its revenue from the Healthcare Segment.
Executives
| C. Mark Hussey |
officer: EVP, CFO and Treasurer |
550 WEST VAN BUREN STREET, CHICAGO IL 60607 |
| Debra Zumwalt |
director |
149 COMMONWEALTH DRIVE, MENLO PARK CA 94025 |
| Ekta Singh-bushell |
director |
9197 S. PEORIA ST., ENGLEWOOD CO 80112 |
| James H Roth |
officer: Chief Executive Officer |
HURON CONSULTING GROUP, 550 WEST VAN BUREN STREET, CHICAGO IL 60607 |
| John Mccartney |
director |
US ROBOTICS INC, 8100 MCCORMICK BLVD, SKOKIE IL 60076 |
| H Eugene Lockhart |
director |
OAK HILL FARM, P.O. BOX 489, 4125 LOUISA ROAD, KESWICK VA 22947 |
| Sawyer Hugh E Iii |
director |
1806 BALLY BUNION DRIVE, DECATUR GA 30097 |
| Kyle Featherstone |
officer: Chief Acct Officer, Controller |
550 W. VAN BUREN, 17TH FLOOR, CHICAGO IL 60607 |
| Joy Brown |
director |
TRACTOR SUPPLY, 5401 VIRGINIA WAY, BRENTWOOD TN 37027 |
| Peter Kenneth Markell |
director |
399 REVOLUTION DRIVE, 6TH FLOOR, SUITE 670, SOMERVILLE MA 02145 |
| John D. Kelly |
officer: Controller |
555 WEST VAN BUREN STREET, CHICAGO IL 60607 |
| Torain Ernest W. Jr. |
officer: EVP, Gen. Counsel & Corp.Sec. |
550 W. VAN BUREN, 17TH FLOOR, CHICAGO IL 60607 |
| James Ronald Dail |
officer: EVP, Chief Operating Officer |
550 W. VAN BUREN STREET, 17TH FLOOR, CHICAGO IL 60607 |
| George Massaro |
director, officer: Vice Chairman |
|
| Diane E. Ratekin |
officer: General Counsel, Asst. Sec. |
550 WEST VAN BUREN STREET, CHICAGO IL 60607 |
Huron Consulting Group (Huron Consulting Group) Headlines
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