What is Nelnet 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, Nelnet's Probability of Financial Distress (%) is 0.06%.
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 Nelnet's Probability of Financial Distress (%)
For the Credit Services subindustry, Nelnet'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.
Nelnet's Probability of Financial Distress (%) Distribution in the Credit Services Industry
For the Credit Services industry and Financial Services sector, Nelnet's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Nelnet's Probability of Financial Distress (%) falls into.
Nelnet 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 |
| = | -7.43 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.06% |
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 banks, 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).
Nelnet Business Description
Traded in Other Exchanges
Address
121 South 13th Street, Suite 100, Lincoln, NE, USA, 68508
Nelnet Inc is a United States based company engaged in these four segments; Loan Servicing and Systems focuses on student and consumer loan origination services and servicing, loan origination and servicing-related technology solutions, and outsourcing business services; Education Technology, Services, and Payment Processing provides education services, payment technology, and community management solutions for K-12 schools, institutions, churches, and businesses; Asset Generation and Management Includes the acquisition and management of student and other loan assets; and Nelnet Bank focuses on the private education and unsecured consumer loan markets. Loan Servicing and Systems Segment derives majority of the company's revenue.
Executives
| Van Deun Jona M |
director |
121 SOUTH 13TH STREET, SUITE 100, LINCOLN NE 68508 |
| William J Munn |
officer: Secy, Chief Legal Off, Gen Cou |
121 S. 13TH STREET, SUITE 100, LINCOLN NE 68508 |
| Kathleen Anne Farrell |
director |
121 SOUTH 13TH STREET, SUITE 100, LINCOLN NE 68508 |
| Dan D Muhleisen |
10 percent owner |
6321 DOECREEK CIRCLE, LINCOLN NE 68516 |
| Preeta D Bansal |
director |
121 SOUTH 13TH STREET, SUITE 100, LINCOLN NE 68508 |
| David S Graff |
director |
121 SOUTH 13TH STREET, SUITE 100, LINCOLN NE 68508 |
| Kimberly Kay Rath |
director |
121 SOUTH 13TH STREET, SUITE 100, LINCOLN NE 68508 |
| Matthew W Dunlap |
director, officer: Chief Business Develop. Off. |
121 SOUTH 13TH STREET, SUITE 100, LINCOLN NE 68508 |
| Magnolia Capital Fund, Lp |
other: See remarks |
1601 DODGE STREET, SUITE 3300, OMAHA NE 68102 |
| Magnolia Group, Llc |
other: See remarks |
1601 DODGE STREET, SUITE 3300, OMAHA NE 68102 |
| Adam K Peterson |
director, other: See below |
1601 DODGE STREET, SUITE 3300, OMAHA NE 68102 |
| Shelby J Butterfield |
10 percent owner |
121 SOUTH 13TH STREET, SUITE 100, LINCOLN NE 68508 |
| Michael S Dunlap |
director, 10 percent owner, officer: Chairman, Co-Chief Ex. Officer |
121 SOUTH 13TH STREET, SUITE 100, LINCOLN NE 68508 |
| Joann M Martin |
director |
6221 ANDREW COURT, LINCOLN NE 68512 |
| Angie Mulheisen |
10 percent owner |
3643 S 48TH STREET P O BOX 82535, LINCOLN NE 68501-2535 |
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