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, National Research'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 Health Information Services subindustry, National Research'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.
National Research Probability of Financial Distress (%) Distribution
For the Healthcare Providers & Services industry and Healthcare sector, National Research's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where National Research's Probability of Financial Distress (%) falls into.
National Research 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 |
| = | -7.75 |
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).
National Research (National Research) Business Description
Traded in Other Exchanges
N/A
Address
1245 Q Street, Lincoln, NE, USA, 68508
National Research Corp is a provider of analytics and insights that facilitate measurement and improvement of the patient and employee experience while also increasing patient engagement and customer loyalty for healthcare providers, payers, and other healthcare organizations. Its portfolio of solutions represents a set of capabilities that individually and collectively provide value to clients. The solutions are offered at an enterprise level through the Voice of the Customer platform, The Governance Institute, and legacy Experience solutions. It operates in the United States and Canada, of which key revenue is derived from the United States.
Executives
| Amandla Mk Trust |
10 percent owner |
C/O THE BRYN MAWR TRUST COMPANY OF DELAW, 20 MONTCHANIN RD, SUITE 100, GREENVILLE DE 19807 |
| Common Property Trust |
10 percent owner |
709 PIER 2, LINCOLN NE 68528 |
| Parul Bhandari |
director |
1775 I STREET NW, SUITE 910, WASHINGTON DC 20006 |
| Stephen H Lockhart |
director |
C/O NATIONAL RESEARCH CORPORATION, 1245 Q STREET, LINCOLN NE 68508 |
| Penny Ann Wheeler |
director |
C/O NATIONAL RESEARCH CORPORATION, 1245 Q STREET, LINCOLN NE 68508 |
| Donald M Berwick |
director |
C/O NATIONAL RESEARCH CORPORATION, 1245 Q STREET, LINCOLN NE 68508 |
| Jona S Raasch |
officer: Vice President and COO |
|
| Kevin R Karas |
officer: SVP Finance, CFO, Treas & Secy |
C/O NATIONAL RESEARCH CORPORATION, 1245 Q STREET, LINCOLN NE 68508 |
| Michael & Karen Hays Grandchildren's Trust Dated March 9, 2009 |
10 percent owner |
C/O BESSEMER TRUST COMPANY OF DELAWARE, 1007 N. ORANGE ST., SUITE 1450, WILMINGTON DE 19801 |
| Joann M Martin |
director |
6221 ANDREW COURT, LINCOLN NE 68512 |
| Helen Hrdy |
officer: Chief Growth Officer |
C/O NATIONAL RESEARCH CORPORATION, 1245 Q STREET, LINCOLN NE 68508 |
| Steven D. Jackson |
officer: President |
C/O NATIONAL RESEARCH CORPORATION, 1245 Q STREET, LINCOLN NE 68508 |
| John N Nunnelly |
director |
P.O. BOX 2175, AMHERST MA 01004 |
| Barbara Mowry |
director |
P.O. BOX 103115, DENVER CO 80250 |
| Michael Hays |
director, 10 percent owner, officer: President and CEO |
C/O NATIONAL RESEARCH CORPORATION, 1245 Q STREET, LINCOLN NE 68508 |
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