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, Spire's Probability of Financial Distress (%) is 0.05%.
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 Utilities - Regulated Gas subindustry, Spire'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.
Spire Probability of Financial Distress (%) Distribution
For the Utilities - Regulated industry and Utilities sector, Spire's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Spire's Probability of Financial Distress (%) falls into.
Spire 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 |
| = | -7.59 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.05% |
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).
Spire (SR) Business Description
Traded in Other Exchanges
Address
700 Market Street, Saint Louis, MO, USA, 63101
Spire Inc is a public utility holding company with three reportable business segments: Gas Utility , Gas Marketing and Midstream. The Gas Utility segment includes the regulated operations of Laclede Gas, Alabama Gas Corporation (Alagasco), and EnergySouth Inc. The Utilities businesses operations include the purchase, retail, distribution, and sale of natural gas in Missouri, Alabama, and Mississippi. The Gas Utility segment generates a majority of the company's revenue but is subject to seasonal fluctuations. The Gas Marketing segment includes Laclede Energy Resources, Inc, whose operations include the marketing of natural gas and related activities on a non-regulated basis and the Midstream segment includes transportation and storage of natural gas.
Executives
| Paul D Koonce |
director |
P O BOX 26532, RICHMOND VA 23261 |
| Adam W. Woodard |
officer: Treasurer |
700 MARKET STREET, ST. LOUIS MO 63101 |
| Steven P Rasche |
officer: Executive Vice President |
700 MARKET STREET, ST. LOUIS MO 63101 |
| Stephen M Mills |
officer: Senior Vice President |
700 MARKET STREET, ST. LOUIS MO 63101 |
| Vincent J Ferrari |
director |
12555 MANCHESTER ROAD, DES PERES MO 63131 |
| Brenda D Newberry |
director |
700 MARKET STREET, ST. LOUIS MO 63101 |
| Carrie J Hightman |
director |
C/O NISOURCE INC., 801 E. 86TH AVENUE, MERRILLVILLE IN 46410 |
| Stupp John P Jr |
director |
STUPP JOHN P JR, #18 ST. ANDREWS DR., ST LOUIS MO 63124 |
| Joseph B. Hampton |
officer: President, AL & MS |
700 MARKET STREET, ST. LOUIS MO 63101 |
| Scott B. Carter |
officer: SVP, COO of Distribution Ops |
700 MARKET STREET, ST. LOUIS MO 63101 |
| Stephen S Schwartz |
director |
46897 BAYSIDE PARKWAY, FREMONT CA 94538 |
| Rob L. Jones |
director |
555 EAST AIRTEX DRIVE, HOUSTON TX 77073 |
| Edward L Glotzbach |
director |
C/O VISUAL NETWORKS INC, 2092 GAITHER ROAD, ROCKVILLE MD 20850 |
| Mark A Borer |
director |
|
| Van Lokeren Mary Ann |
director |
|
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