GE-Shen Bhd (XKLS:7197) Probability of Financial Distress (%) : 0.04% (As of Jun. 20, 2024)

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What is GE-Shen Bhd 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, GE-Shen Bhd's Probability of Financial Distress (%) is 0.04%.

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 GE-Shen Bhd's Probability of Financial Distress (%)

For the Metal Fabrication subindustry, GE-Shen Bhd'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.

GE-Shen Bhd's Probability of Financial Distress (%) Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, GE-Shen Bhd's Probability of Financial Distress (%) distribution charts can be found below:

* The bar in red indicates where GE-Shen Bhd's Probability of Financial Distress (%) falls into.

GE-Shen Bhd 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

-7.80

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

PFD	=	1	/	(1 + e^(-LPFD))	*	100%
	=	0.04%

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).

GE-Shen Bhd (XKLS:7197) 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.

GE-Shen Bhd Probability of Financial Distress (%) Related Terms

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GE-Shen Bhd (XKLS:7197) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » GE-Shen Corp Bhd (XKLS:7197) » Definitions » Probability of Financial Distress (%)

Comparable Companies

Traded in Other Exchanges

N/A

Address

No. 1, Jalan Syed Putra Utara, Level 13, Menara MBMR, Unit No. 13-05 & 13-07, Kuala Lumpur, SGR, MYS, 58000

Website

https://www.gscorp.com.my

GE-Shen Corp Bhd is engaged in the business of investment holding and the provision of management services. The company is organized into two main geographical segments: Malaysia and Singapore, which consists of the manufacture of plastic moulded products, components, tools and die, and fabricated metal products, and Vietnam, which consists of the manufacture of plastic moulded products and components. It serves various sectors including automotive, healthcare, medical devices, diagnostics, infrastructure and industrial consumer electronics, and others.

GE-Shen Bhd (XKLS:7197) Headlines

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