State Auto Financial (State Auto Financial) Probability of Financial Distress (%) : 0.00% (As of May. 06, 2024)

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What is State Auto Financial 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, State Auto Financial'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 of State Auto Financial's Probability of Financial Distress (%)

For the Insurance - Property & Casualty subindustry, State Auto Financial'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.

State Auto Financial's Probability of Financial Distress (%) Distribution in the Insurance Industry

For the Insurance industry and Financial Services sector, State Auto Financial's Probability of Financial Distress (%) distribution charts can be found below:

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

State Auto Financial 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

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 insurance companies, CASHMTA is measured as:

CASHMTA

(Balance Sheet Cash And Cash Equivalents + Short-term investments)

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

MB	=	Market Cap	/	Adjusted Book Equity
	=	Market Cap	/	(Total Stockholders Equity + 0.1 * ( Market Cap - Total Stockholders Equity))

8. PRICE

PRICE is measured as the log of the stock price, capped at log(15).

State Auto Financial (NAS:STFC) 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.

State Auto Financial Probability of Financial Distress (%) Related Terms

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State Auto Financial (State Auto Financial) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Insurance » State Auto Financial Corp (NAS:STFC) » Definitions » Probability of Financial Distress (%)

Comparable Companies

Traded in Other Exchanges

N/A

Address

518 East Broad Street, Columbus, OH, USA, 43215-3976

Website

http://www.stateauto.com

State Auto Financial Corp is a property and casualty insurance holding company. The company is engaged in writing personal, business and specialty insurance. It markets its insurance products through the United States. Personal Insurance Segment and its products include personal auto, homeowners. Commercial Insurance Segment products include commercial auto, small commercial package, middle-market commercial, workers' compensation, farm and ranch, and other commercials.

Executives

Kim Burton Garland	officer: Senior Vice President	518 EAST BROAD STREET COLUMBUS OH 43215
Steven Eugene English	officer: Vice President	MERIDIAN CENTER P.O. BOX 1980 INDIANAPOLIS IN 46206
Elise Marie Spriggs	officer: Senior Vice President	518 EAST BROAD STREET COLUMBUS OH 43215
Paul M Stachura	officer: Senior Vice President	518 EAST BROAD STREET COLUMBUS OH 43215
Michael Larocco	officer: President and CEO	C/O SAFECO 4333 BROOKLYN AVENUE NE SEATTLE WA 98185
Jason Earl Berkey	officer: Senior Vice President	518 EAST BROAD ST. COLUMBUS OH 43215
Matthew Stanley Mrozek	officer: Vice President	518 EAST BROAD STREET COLUMBUS OH 43215
Matthew Robert Pollak	officer: Vice President	518 EAST BROAD STREET COLUMBUS OH 43215
Scott Alan Jones	officer: Vice President	518 EAST BROAD STREET COLUMBUS OH 43215
Peter B. Migliorato	director, of parent	3401 NORTH OCEAN, NORTH 301, PALM BEACH FL 33480
Melissa A Centers	officer: Senior Vice President	518 EAST BROAD STREET COLUMBUS OH 43215
James R Sappington	director, of parent	STATE AUTO FINANCIAL CORPORATION, 518 EAST BROAD STREET, COLUMBUS OH 43215
Michelle Lantow	director	720 SW WASHINGTON STREET, SUITE 550, PORTLAND OR 97205
Kym Marie Hubbard	director	2131 N. LAKEWOOD AVE. CHICAGO IL 60614
John M Petrucci	officer: Vice President