What is Korn Ferry 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, Korn Ferry'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 Korn Ferry's Probability of Financial Distress (%)
For the Staffing & Employment Services subindustry, Korn Ferry'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.
Korn Ferry's Probability of Financial Distress (%) Distribution in the Business Services Industry
For the Business Services industry and Industrials sector, Korn Ferry's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Korn Ferry's Probability of Financial Distress (%) falls into.
Korn Ferry 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 |
| = | -8.57 |
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).
Korn Ferry (Korn Ferry) Business Description
Traded in Other Exchanges
Address
1900 Avenue of the Stars, Suite 1500, Los Angeles, CA, USA, 90067
Korn Ferry is a United States-based firm engaged in organizational consulting and management recruitment that helps clients fill mid- to high-level management positions. The company's segment includes Consulting; Digital; Executive Search and RPO and Professional Search.
Executives
| Matthew J Espe |
director |
|
| Jeanne Macdonald |
officer: CEO RPO |
1900 AVENUE OF THE STARS, SUITE 1500, LOS ANGELES CA 90067 |
| Charles L. Harrington |
director |
5875 TRINITY PKWY #300, CENTREVILLE VA 20120 |
| Michael Distefano |
officer: See Remarks |
1900 AVENUE OF THE STARS, SUITE 1500, LOS ANGELES CA 90067 |
| Gary D Burnison |
director, officer: CEO |
C/O KORN FERRY INTERNATIONAL, 800 CENTURY PARK EAST STE 900, LOS ANGELES CA 90067 |
| Laura M Bishop |
director |
1900 AVENUE OF THE STARS, SUITE 1500, LOS ANGELES CA 90067 |
| Robert P Rozek |
officer: EVP and CFO |
343 STATE STREET, ROCHESTER NY 146500211 |
| Byrne K Mulrooney |
officer: CEO of Futurestep |
2050 SPECTRUM BOULEVARD, FT. LAUDERDALE FL 33309 |
| Jerry Leamon |
director |
C/O KORN/FERRY INTERNATIONAL, 1900 AVENUE OF THE STARS, SUITE 2600, LOS ANGELES CA 90067 |
| George T Shaheen |
director |
|
| Len J Lauer |
director |
2001 EDMUND HALLEY DRIVE, RESTON VA 20191 |
| Lori Jean Robinson |
director |
5875 LANDERBROOK DRIVE, SUITE 220, CLEVELAND OH 44124 |
| Mark Arian |
officer: CEO of Hay Group |
C/O KORN/FERRY INTERNATIONAL, 1900 AVE. OF THE STARS, SUITE 2600, LOS ANGELES CA 90067 |
| Debra J Perry |
director |
515 RIDGEWOOD AVENUE, GLEN RIDGE NJ 07028 |
| Angel R Martinez |
director |
C/O TUPPERWARE BRANDS CORP, PO BOX 2353, ORLANDO FL 32802-2353 |
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