GURUFOCUS.COM » STOCK LIST » Basic Materials » Agriculture » Zhejiang Qianjiang Biochemical Co Ltd (SHSE:600796) » Definitions » Probability of Financial Distress (%)

Zhejiang Qianjiang Biochemical Co (SHSE:600796) Probability of Financial Distress (%) : 0.03% (As of Mar. 15, 2025)


View and export this data going back to 1997. Start your Free Trial

What is Zhejiang Qianjiang Biochemical Co 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, Zhejiang Qianjiang Biochemical Co'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 Zhejiang Qianjiang Biochemical Co's Probability of Financial Distress (%)

For the Agricultural Inputs subindustry, Zhejiang Qianjiang Biochemical Co'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.


Zhejiang Qianjiang Biochemical Co's Probability of Financial Distress (%) Distribution in the Agriculture Industry

For the Agriculture industry and Basic Materials sector, Zhejiang Qianjiang Biochemical Co's Probability of Financial Distress (%) distribution charts can be found below:

* The bar in red indicates where Zhejiang Qianjiang Biochemical Co's Probability of Financial Distress (%) falls into.



Zhejiang Qianjiang Biochemical Co 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
=-8.00

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

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).


Zhejiang Qianjiang Biochemical Co  (SHSE:600796) 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.


Zhejiang Qianjiang Biochemical Co Probability of Financial Distress (%) Related Terms

Thank you for viewing the detailed overview of Zhejiang Qianjiang Biochemical Co's Probability of Financial Distress (%) provided by GuruFocus.com. Please click on the following links to see related term pages.


Zhejiang Qianjiang Biochemical Co Business Description

Traded in Other Exchanges
N/A
Address
No.178 Qianjiang West Road, Haizhou Street, Qianjiang Building, Zhejiang Province, Haining, CHN, 314400
Zhejiang Qianjiang Biochemical Co Ltd is primarily engaged in the production of bio-pesticides, bio-veterinary drugs, and biopharmaceuticals. The company's product profile includes gibberellic acid, abamectin, methylamino abamectin, validamycin, and other products.
Executives
Zhu Jin Shan Director
Shen Jian Hao senior management
Huang Yong You senior management
Gao Yun Yue Director
Zhu Yi Tong Director
Zheng Wei Jian Director
Hu Ming Director
Si Wen Supervisors
Song Jiang Lin senior management
Zhu Bing Qi Supervisors
Yu Qiang Supervisors
Fan Ke Sen Supervisors
Qiu Guo Yin senior management
Xu Hai Ying Supervisors
Gu Jian Zhong Supervisors

Zhejiang Qianjiang Biochemical Co Headlines

No Headlines