WDGJY (John Wood Group) Probability of Financial Distress (%) : 4.26% (As of Dec. 14, 2024)

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What is John Wood Group 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, John Wood Group's Probability of Financial Distress (%) is 4.26%.

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 John Wood Group's Probability of Financial Distress (%)

For the Oil & Gas Integrated subindustry, John Wood Group'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.

John Wood Group's Probability of Financial Distress (%) Distribution in the Oil & Gas Industry

For the Oil & Gas industry and Energy sector, John Wood Group's Probability of Financial Distress (%) distribution charts can be found below:

* The bar in red indicates where John Wood Group's Probability of Financial Distress (%) falls into.

John Wood Group 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

-3.11

The Probability of Financial Distress (%) (PFD) was then obtianed by:

PFD	=	1	/	(1 + e^(-LPFD))	*	100%
	=	4.26%

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

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).

John Wood Group (OTCPK:WDGJY) 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.

John Wood Group Probability of Financial Distress (%) Related Terms

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John Wood Group Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Energy » Oil & Gas » John Wood Group PLC (OTCPK:WDGJY) » Definitions » Probability of Financial Distress (%)

Comparable Companies

Traded in Other Exchanges

WDGJF:USA WGl:UK WG.:UK JWG1:Germany

Address

Hareness Road, Sir Ian Wood House, Altens Industrial Estate, Aberdeen, GBR, AB12 3LE

Website

https://www.woodplc.com

John Wood Group PLC is an energy services company that provides a range of engineering, production, and technical solutions across energy and materials industries. Operations are divided into four segments: The Projects segment is focused on providing front-end engineering services, procurement, and project management. The Operations segment which derives key revenue, focuses on improving operational efficiency by providing maintenance, modification, and operation services. The Consulting segment is a technical consultancy division providing advisory services, and the Investment Services manages a range of legacy or non-core businesses and investments. Geographically, the company generates revenue from the USA, Europe, and the rest of the world.