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PDFS (PDF Solutions) Probability of Financial Distress (%) : 0.06% (As of Mar. 15, 2025)


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What is PDF Solutions 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, PDF Solutions'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 PDF Solutions's Probability of Financial Distress (%)

For the Software - Application subindustry, PDF Solutions'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.


PDF Solutions's Probability of Financial Distress (%) Distribution in the Software Industry

For the Software industry and Technology sector, PDF Solutions's Probability of Financial Distress (%) distribution charts can be found below:

* The bar in red indicates where PDF Solutions's Probability of Financial Distress (%) falls into.



PDF Solutions 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
=-7.50

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

NIMTAAVG=Net Income / Market Total Assets
=Net Income / (Market Cap + Total Liabilities)

*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

TLMTA=Total Liabilities / Market Total Assets

3. CASHMTA = Cash to Market Total Assets

For non-financial companies, CASHMTA is measured as:

CASHMTA=Cash, Cash Equivalents, Marketable Securities / Market Total Assets

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).


PDF Solutions  (NAS:PDFS) Probability of Financial Distress (%) Explanation

Like the Altman Z-Score, the PFD measures a company's bankruptcy risk in the upcoming year. 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.


PDF Solutions Probability of Financial Distress (%) Related Terms

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PDF Solutions Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Technology » Software » PDF Solutions Inc (NAS:PDFS) » Definitions » Probability of Financial Distress (%)
Traded in Other Exchanges
Address
2858 De La Cruz Boulevard, Santa Clara, CA, USA, 95050
PDF Solutions Inc offers products and services designed to empower engineers and data scientists across the semiconductor ecosystem to improve the yield, quality, and profitability of their products. The solutions combine proprietary software, physical intellectual property (or IP) for integrated circuit (or IC) designs, electrical measurement hardware tools, various methodologies, and professional services. The company's products and services are sold to integrated device manufacturers (or IDMs), fabless semiconductor companies, foundries, outsourced semiconductor assembly and test (or OSATs), and system houses.
Executives
Andrzej Strojwas officer: CTO 2858 DE LA CRUZ BLVD., SANTA CLARA CA 95050
Nancy Erba director C/O INFINERA CORPORATION, 140 CASPIAN COURT, SUNNYVALE CA 94089
Shuo Zhang director PDF SOLUTIONS, INC., 2858 DE LA CRUZ BOULEVARD, SANTA CLARA CA 95050
Adnan Raza officer: EVP, Finance and CFO PDF SOLUTIONS, 2858 DE LA CRUZ BOULEVARD, SANTA CLARA CA 95050
Ye Jane Li director 200 FLYNN ROAD, CAMARILLO CA 93012-8790
Joseph R Bronson director 7005 SOUTHFRONT ROAD, LIVERMORE CA 94551
Michael B Gustafson director 380 INTERLOCKEN CRESCENT, BROOMFIELD CO 80021
Kimon Michaels director, officer: EVP of Products and Solutions 333 WEST SAN CARLOS STREET, SUITE 700, SAN JOSE CA 95110
Marco Iansiti director 92 HAVEN ST., DOVER MA 02038
Gerald Zheyao Yin director 2-10 WEIFANG XI ROAD, PUDONG NEW DISTRICT, SHANGHAI F4 200122
Russell Christine officer: VP, Finance and CFO 17165 PINE STREET, LOS GATOS CA 95032
Lucio Lanza director 141 CASPIAN COURT, SUNNYVALE CA 94089
Kwangh Kim officer: VP of Business Development 333 WEST SAN CARLOS STREET, SUITE 1000, SAN JOSE CA 95110
Gregory C Walker officer: CFO, VP Finance 2 RESULTS WAY, CUPERTINO CA 95014
Hartgring Cornelis officer: VP- Client Services & Sales 333 WEST SAN CARLOS STREET, SUITE 700, SAN JOSE CA 95110