What is Vroom 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, Vroom's Probability of Financial Distress (%) is 4.61%.
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 Vroom's Probability of Financial Distress (%)
For the Auto & Truck Dealerships subindustry, Vroom'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.
Vroom's Probability of Financial Distress (%) Distribution in the Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Vroom's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Vroom's Probability of Financial Distress (%) falls into.
Vroom 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 |
| = | -3.03 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 4.61% |
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).
Vroom Business Description
Traded in Other Exchanges
Address
3600 West Sam Houston Parkway South, Floor 4, Houston, TX, USA, 77042
Vroom Inc is an end-to-end e-commerce platform for the used vehicles industry. The Company's scalable, data-driven technology brings all phases of the car buying and selling process to consumers offering an extensive selection of used vehicles, transparent pricing, competitive financing, and at-home pick-up and delivery. Its three reportable segments are: The E-commerce segment represents retail sales of used vehicles through its e-commerce platform and fees earned on sales of value-added products associated with those vehicle sales, The Wholesale segment represents sales of used vehicles through wholesale channels, and The Retail Financing segment represents UACC's operations with its network of third-party dealership customers.
Executives
| Mylod Robert J Jr |
director |
|
| Agnieszka Zakowicz |
officer: Principal Accounting Officer |
C/O VROOM, INC., 1375 BROADWAY, FLOOR 11, NEW YORK NY 10018 |
| Patricia Moran |
officer: See remarks |
GREENHILL & CO., 300 PARK AVENUE, 17TH FLOOR, NEW YORK NY 10022 |
| Carol Denise Stott |
officer: See remarks |
C/O VROOM, INC., 1375 BROADWAY, FLOOR 11, NEW YORK NY 10018 |
| Thomas H Shortt |
officer: Chief Operating Officer |
C/O VROOM INC, 1375 BROADWAY, 11TH FLOOR, NEW YORK NY 10018 |
| Robert R. Krakowiak |
officer: Chief Financial Officer |
633 NATALIE LANE, NORTHVILLE MI 48167 |
| Laura W Lang |
director |
DIGITAS INC., 800 BOYLSTON STREET, BOSTON MA 02199 |
| Timothy M Crow |
director |
2455 PACES FERRY ROAD, NW, ATLANTA GA 30339 |
| Paul J. Hennessy |
director, officer: Chief Executive Officer |
C/O SHUTTERSTOCK, INC., 350 FIFTH AVENUE, 21ST FLOOR, NEW YORK NY 10118 |
| Catterton Management Company, L.l.c. |
director, 10 percent owner |
599 WEST PUTNAM AVENUE, GREENWICH CT 06830 |
| David K. Jones |
officer: Chief Financial Officer |
1375 BROADWAY, FLOOR 11, NEW YORK NY 10018 |
| Scott Arnold Dahnke |
director, 10 percent owner |
599 WEST PUTNAM AVENUE, GREENWICH CT 06830 |
| Cgp2 Lone Star, L.p. |
10 percent owner |
599 WEST PUTNAM AVENUE, GREENWICH CT 06930 |
| Frederick Terrell |
director |
17 STATE STREET, NEW YORK NY 10004 |
| Paula B Pretlow |
director |
C/O CION ARES MANAGEMENT LLC, 2000 AVENUE OF THE STARS, 12TH FLOOR, LOS ANGELES CA 90067 |
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