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, Shell Midstream Partners LP'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
For the Oil & Gas Midstream subindustry, Shell Midstream Partners LP'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.
Shell Midstream Partners LP Probability of Financial Distress (%) Distribution
For the Oil & Gas industry and Energy sector, Shell Midstream Partners LP's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Shell Midstream Partners LP's Probability of Financial Distress (%) falls in comparison to its industry or sector. The grey bar indicates the Probability of Financial Distress (%)'s extreme value range as defined by GuruFocus.
Shell Midstream Partners LP 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).
Shell Midstream Partners LP (NYSE:SHLX) Business Description
Traded in Other Exchanges
N/A
Address
150 North Dairy Ashford Road, A0482-A, Houston, TX, USA, 77079
Shell Midstream Partners LP is a US-based limited partnership that is formed to own, operate, develop and acquire pipelines and other midstream assets. The company holds an interest in several entities which own crude oil, refined products and natural gas pipelines, and crude tank storage and terminal system. It provides a transportation and storage facility to deliver refined products from Gulf Coast markets to demand centers. The company earns revenue through the long-term transportation agreements by charging fees for the transportation of crude oil and refined products through its pipelines.
Executives
| Sopc Holdings West Llc |
10 percent owner |
150 N. DAIRY ASHFORD RD., HOUSTON TX 77079 |
| Fierro A Carlos |
director |
910 LOUISIANA STREET, HOUSTON TX 77002 |
| Gregory T. Mouras |
officer: Vice President, Operations |
P.O. BOX 61933, NEW ORLEANS LA 70161 |
| Cynthia V. Hablinski |
director |
150 N. DAIRY ASHFORD, HOUSTON TX 77079 |
| Sean Guillory |
officer: Vice President, Commercial |
150 N. DAIRY ASHFORD, HOUSTON TX 77079 |
| David A. Connolly |
director |
1000 MAIN STREET, LEVEL 12, HOUSTON TX 77002 |
| Stanley Jesse C. H. |
officer: Vice President, Operations |
150 N. DAIRY ASHFORD, HOUSTON TX 77079 |
| Anne C. Anderson |
director |
150 N. DAIRY ASHFORD, HOUSTON TX 77079 |
| James J Bender |
director |
1601 UTICA AVENUE SOUTH, SUITE 900, ST. LOUIS PARK MN 55416 |
| Nick Arzymanow |
officer: Controller |
150 N. DAIRY ASHFORD, HOUSTON TX 77079 |
| Brenda Stout |
director |
150 N. DAIRY ASHFORD ROAD, HOUSTON TX 77079 |
| Curtis R Frasier |
director |
910 LOUISIANA STREET, HOUSTON TX 77002 |
| Steven Ledbetter |
officer: Vice President - Commercial |
150 N. DAIRY ASHFORD ROAD, HOUSTON TX 77079 |
| Marcel Teunissen |
director |
150 N. DAIRY ASHFORD ROAD, HOUSTON TX 77079 |
| Elaine Mccown |
officer: Controller |
ONE SHELL PLAZA, 910 LOUISIANA STREET, HOUSTON TX 77002 |
Shell Midstream Partners LP (NYSE:SHLX) Headlines
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