What is News 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, News'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 News's Probability of Financial Distress (%)
For the Entertainment subindustry, News'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.
News's Probability of Financial Distress (%) Distribution in the Media - Diversified Industry
For the Media - Diversified industry and Communication Services sector, News's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where News's Probability of Financial Distress (%) falls into.
News 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 |
| = | -8.31 |
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
*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).
News (NWSA) Business Description
Traded in Other Exchanges
Address
1211 Avenue of the Americas, New York, NY, USA, 10036
News Corporation is a diversified media conglomerate with significant presence in the U.S, the U.K., and Australia. Key mastheads include The Wall Street Journal, Herald Sun, and The Times. The company also has a strong presence in the Australian pay-TV market through Fox Sports and Foxtel (both 65%-owned), while its 61%-owned REA Group is the dominant real estate classified business in Australia. In addition, it owns HarperCollins, one of the largest book publishers in the world, and also has a substantial digital property advertising business (Move) in the U.S.
Executives
| Marygrace Degrazio |
officer: Chief Accounting Officer |
1211 AVENUE OF THE AMERICAS, NEW YORK NY 10036 |
| Kelly Ayotte |
director |
C/O NEWS CORPORATION, 1211 AVENUE OF THE AMERICAS, NEW YORK NY 10036 |
| Susan Panuccio |
officer: Chief Financial Officer |
C/O NEWS CORPORATION, 1211 AVENUE OF THE AMERICAS, NEW YORK NY 10036 |
| David B Pitofsky |
officer: General Counsel |
C/O NEWS CORPORATION, 1211 AVENUE OF THE AMERICAS, NEW YORK NY 10036 |
| Kevin Halpin |
officer: Deputy Chief Financial Officer |
1211 AVENUE OF THE AMERICAS, NEW YORK NY 10036 |
| Joel Klein |
director |
C/O NEWS AMERICA INCORPORATED, 1211 AVENUE OF THE AMERICAS, NEW YORK NY 10036 |
| James R Murdoch |
director |
C/O LUPA SYSTEMS, 363 LAFAYETTE STREET, NEW YORK NY 10022 |
| John Elkann |
director |
1211 AVENUE OF THE AMERICAS, NEW YORK NY 10003 |
| Elaine L. Chao |
director |
C/O DOLE FOOD COMPANY, INC., ONE DOLE DRIVE, WESTLAKE VILLAGE CA 91362 |
| Ana Paula Pessoa |
director |
1211 AVENUE OF THE AMERICAS, NEW YORK NY 10003 |
| Masroor Siddiqui |
director |
1211 AVENUE OF THE AMERICAS, NEW YORK NY 10003 |
| Natalie Bancroft |
director |
C/O NEWS AMERICA INCORPORATED, 1211 AVENUE OF THE AMERICAS, NEW YORK NY 10036 |
| Jose Maria Aznar |
director |
C/O NEWS AMERICA INCORPORATED, 1211 AVENUE OF THE AMERICAS, NEW YORK NY 10036 |
| Lachlan K Murdoch |
director |
C/O NEWS AMERICA INCORPORATED, 1211 AVENUE OF THE AMERICAS, NEW YORK NY 10036 |
| Cruden Financial Services Llc |
10 percent owner |
C/O MCDONALD CARANO WILSON LLP, 100 LIBERTY STREET, RENO NV 89501 |
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