What is Noranda Aluminum Holding 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, Noranda Aluminum Holding's Probability of Financial Distress (%) is 0.00%.
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 Noranda Aluminum Holding's Probability of Financial Distress (%)
For the Aluminum subindustry, Noranda Aluminum Holding'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.
Noranda Aluminum Holding's Probability of Financial Distress (%) Distribution in the Metals & Mining Industry
For the Metals & Mining industry and Basic Materials sector, Noranda Aluminum Holding's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Noranda Aluminum Holding's Probability of Financial Distress (%) falls into.
Noranda Aluminum Holding 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 |
| = | 0.00 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.00% |
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).
Noranda Aluminum Holding (Noranda Aluminum Holding) Business Description
Traded in Other Exchanges
N/A
Address
801 Crescent Centre Drive, Suite 600, Franklin, TN, USA, 37067
Noranda Aluminum Holding Corporation is an integrated producer of value-added primary aluminum products and rolled aluminum coils. The company's downstream business is one of the largest aluminum foil producers in North America. Its upstream business is a large producer of primary aluminum in the U.S.
Executives
| Richard B Evans |
director |
C/O BOATWATER INC, 55 EAST CAMPERDOWN WAY, GREENVILLE SC 29601 |
| Ronald S Rolfe |
director |
825 8TH AVENUE, 38TH FLOOR, NEW YORK NY 10019 |
| Carl J Rickertsen |
director |
MICROSTRATEGY INCORPORATED, 1850 TOWERS CRESCENT PLAZA, TYSONS CORNER VA 22182 |
| Alan H Schumacher |
director |
C/O QUALITY DISTRIBUTION, INC., 4041 PARK OAKS BOULEVARD, SUITE 200, TAMPA FL 33610 |
| Gail E Lehman |
officer: Gen Counsel/Sec/Chief Adm Off |
801 CRESCENT CENTRE DRIVE, SUITE 600, FRANKLIN TN 37067 |
| Thomas R Miklich |
director |
C/O OM GROUP INC 50 PACIFIC SQUARE #3500 CLEVELAND OH 44113 |
| Dale W Boyles |
officer: Chief Financial Officer |
1000 EAST HANES MILL ROAD, WINSTON-SALEM NC 27105 |
| Pasquale Fiore |
director |
201 ISABELLA STREET, SUITE 500, PITTSBURGH PA 15212 |
| Apollo Principal Holdings I Gp, Llc |
10 percent owner |
TWO MANHATTANVILLE ROAD, SUITE 203, PURCHASE NY 10577 |
| Apollo Investment Fund Vi L P |
10 percent owner |
2 MANHATTAVILLE RD, PURCHASE NY 10577 |
| Apollo International Management Gp, Llc |
10 percent owner |
9 WEST 57TH STREET, NEW YORK NY 10019 |
| Apollo International Management, L.p. |
10 percent owner |
9 WEST 57TH STREET, NEW YORK NY 10019 |
| Apollo Management Vi, L.p. |
10 percent owner |
9 WEST 57TH STREET, 43RD FLOOR, NEW YORK NY 10019 |
| Aif Vi Management, Llc |
10 percent owner |
9 WEST 57TH STREET, 43RD FLOOR, NEW YORK NY 10019 |
| Apollo Management Gp, Llc |
10 percent owner |
TWO MANHATTANVILLE ROAD, SUITE 203, PURCHASE NY 10577 |
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