What is Okta 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, Okta's Probability of Financial Distress (%) is 0.03%.
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 Okta's Probability of Financial Distress (%)
For the Software - Infrastructure subindustry, Okta'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.
Okta's Probability of Financial Distress (%) Distribution in the Software Industry
For the Software industry and Technology sector, Okta's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Okta's Probability of Financial Distress (%) falls into.
Okta 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 |
| = | -7.97 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.03% |
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).
Okta (OKTA) Business Description
Traded in Other Exchanges
Address
100 First Street, Suite 600, San Francisco, CA, USA, 94105
Okta is a cloud-native security company that focuses on identity and access management. The San Francisco-based firm went public in 2017 and focuses on two key client stakeholder groups: workforces and customers. Okta's workforce offerings enable a company's employees to securely access its cloud-based and on-premises resources. The firm's customer offerings allow its clients' customers to securely access the client's applications.
Executives
| Larissa Schwartz |
officer: See Remarks |
C/O OKTA, INC., 100 FIRST STREET, SUITE 600, SAN FRANCISCO CA 94105 |
| Jacques Frederic Kerrest |
director, officer: Chief Operating Officer |
C/O OKTA, INC., 301 BRANNAN STREET 1ST FLOOR, SAN FRANCISCO CA 94107 |
| Shibu Ninan |
officer: Chief Accounting Officer |
C/O OKTA, INC., 100 FIRST STREET, SUITE 600, SAN FRANCISCO CA 94105 |
| Brett Tighe |
officer: See Remarks |
C/O OKTA, INC., 100 FIRST STREET, SUITE 600, SAN FRANCISCO CA 94105 |
| Todd Mckinnon |
director, 10 percent owner, officer: Chief Executive Officer |
C/O OKTA, INC., 301 BRANNAN STREET 1ST FLOOR, SAN FRANCISCO CA 94107 |
| Jonathan T Runyan |
officer: General Counsel and Secretary |
C/O OKTA, INC., 301 BRANNAN STREET 1ST FLOOR, SAN FRANCISCO CA 94107 |
| Ledger Susan St. |
officer: See Remarks |
C/O OKTA, INC., 100 FIRST STREET, SUITE 600, SAN FRANCISCO CA 94105 |
| Dixon Robert L Jr |
director |
120 MONUMENT CIRCLE, INDIANAPOLIS IN 46204 |
| Emilie Choi |
director |
C/O COINBASE GLOBAL, INC., 100 PINE STREET, SUITE 1250, SAN FRANCISCO CA 94111 |
| Christopher K Kramer |
officer: Chief Accounting Officer |
C/O OKTA, INC., 100 FIRST STREET, SUITE 600, SAN FRANCISCO CA 94105 |
| Benjamin A Horowitz |
director, 10 percent owner |
2865 SAND HILL ROAD #101, MENLO PARK CA 94025 |
| Jeff Epstein |
director |
C/O PRICELINE COM INC, 800 CONNECTICUT AVENUE, NORWALK CT 06854 |
| Michael R Kourey |
director |
|
| William E Losch |
officer: Chief Financial Officer |
DREAMWORKS ANIMATION SKG, INC., 1000 FLOWER STREET, GLENDALE CA 91201 |
| Charles Race |
officer: See Remarks |
C/O INFORMATICA CORPORATION, 2100 SEAPORT BOULEVARD, REDWOOD CITY CA 94063 |
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