What is Viper Energy 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, Viper Energy's Probability of Financial Distress (%) is 0.02%.
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 Viper Energy's Probability of Financial Distress (%)
For the Oil & Gas Midstream subindustry, Viper Energy'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.
Viper Energy's Probability of Financial Distress (%) Distribution in the Oil & Gas Industry
For the Oil & Gas industry and Energy sector, Viper Energy's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Viper Energy's Probability of Financial Distress (%) falls into.
Viper Energy 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 |
| = | -8.69 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.02% |
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).
Viper Energy (Viper Energy) Business Description
Traded in Other Exchanges
Address
500 West Texas, Suite 1200, Midland, TX, USA, 79701
Viper Energy Inc was formed by Diamondback Energy in 2014 to own mineral royalty interests in oil and natural gas properties in the Permian Basin. At the end of 2020, Viper owns 24,350 net royalty acres that produced 26,551 boe/d. Proved reserves are mostly oil, and at the end of 2020 stand at 99,392 mboe.
Executives
| Bx Swt Ml Holdco Llc |
10 percent owner |
345 PARK AVENUE, NEW YORK NY 10154 |
| Blackstone Holdings Iii L.p. |
10 percent owner |
C/O BLACKSTONE INC., 345 PARK AVENUE, NEW YORK NY 10154 |
| Laurie H Argo |
director |
1100 LOUISIANA STREET, SUITE 1000, HOUSTON TX 77002 |
| Frank C. Hu |
director |
625 LIBERTY AVE., SUITE 1700, PITTSBURGH PA 15222 |
| Armour Spencer D Iii |
director |
400 W. ILLINOIS, SUITE 800, MIDLAND TX 79701 |
| Bx Guidon Topco Llc |
10 percent owner |
C/O BLACKSTONE MANAGEMENT PARTNERS L.L.C, 345 PARK AVENUE, 43RD FLOOR, NEW YORK NY 10154 |
| Matt Zmigrosky |
officer: Exec. VP and General Counsel |
500 WEST TEXAS AVENUE, SUITE 1200, MIDLAND TX 79701 |
| Bx Swallowtail Royalties Holding Llc |
10 percent owner |
C/O THE BLACKSTONE GROUP INC., NEW YORK NY 10154 |
| Swallowtail Royalties Ii Llc |
10 percent owner |
7750 N. MACARTHUR BLVD., STE. 120-370, IRVING TX 75063 |
| Swallowtail Royalties Llc |
10 percent owner |
545 E. JOHN CARPENTER FWY., STE. 1300, IRVING TX 75062 |
| Swallowtail Royalties Holdings Llc |
10 percent owner |
545 E. JOHN CARPENTER FWY., STE. 1300, IRVING TX 75062 |
| Guidon Energy Holdings Lp |
10 percent owner |
C/O BLACKSTONE MANAGEMENT PARTNERS L.L.C, 345 PARK AVENUE, 43RD FLOOR, NEW YORK NY 10154 |
| Guidon Energy Holdings Gp Llc |
10 percent owner |
C/O BLACKSTONE MANAGEMENT PARTNERS L.L.C, 345 PARK AVENUE, 43RD FLOOR, NEW YORK NY 10154 |
| Blackstone Energy Management Associates Ii L.l.c. |
10 percent owner |
C/O THE BLACKSTONE GROUP L.P., 345 PARK AVE., NEW YORK NY 10154 |
| Blackstone Ema Ii L.l.c. |
10 percent owner |
C/O THE BLACKSTONE GROUP L.P., 345 PARK AVE., NEW YORK NY 10154 |
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