Molycorp (XSWX:MCP) Probability of Financial Distress (%) : 0.00% (As of May. 24, 2024)

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

For the Other Industrial Metals & Mining subindustry, Molycorp'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.

Molycorp's Probability of Financial Distress (%) Distribution in the Metals & Mining Industry

For the Metals & Mining industry and Basic Materials sector, Molycorp's Probability of Financial Distress (%) distribution charts can be found below:

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

Molycorp 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 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).

Molycorp (XSWX:MCP) 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.

Molycorp Probability of Financial Distress (%) Related Terms

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Molycorp (XSWX:MCP) Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

N/A

Address

Website

http://www.molycorp.com

Molycorp Inc, formerly known as Rare Earth Acquisitions LLC, was formed on March 4, 2010 as a new Delaware corporation. The Company manufactures custom engineered rare earth and rare metal products. Its business is organized into four reportable segments: Resources; Chemicals and Oxides; Magnetic Materials and Alloys; and Rare Metals. The Resources segment includes its operations at the Molycorp Mountain Pass Rare Earth Facility, where it conducts rare earth minerals extraction to produce: rare earth concentrates; REO, including lanthanum, cerium, neodymium, praseodymium, and yttrium; heavy rare earth concentrates, which include samarium, europium, gadolinium, terbium, dysprosium, and others; and SorbXTM, a line of proprietary rare earth-based water treatment products. The Chemicals and Oxides segment includes: production of REO at its operations at Molycorp Silmet; separated heavy rare earth oxides and other custom engineered materials from its facilities in Jiangyin, Jiangsu Province, China; and production of REO, salts of rare earth elements, or REEs, zirconium-based engineered materials and mixed rare earth/zirconium oxides from its facilities in Zibo, Shandong Province, China. The Magnetic Materials and Alloys segment includes: the production of Neo Powders through its wholly-owned manufacturing facilities in Tianjin, China, and Korat, Thailand, under the Molycorp Magnequench brand. This operating segment also includes manufacturing of neodymium and samarium magnet alloys, other specialty alloy products and rare earth metals at its MMA facility, located in Tolleson, Arizona. The Rare Metals segment produces, reclaims, refines and markets high value niche metals and their compounds that include gallium, indium, rhenium, tantalum, and niobium. Applications from products made in this segment include wireless technologies, LED, flat panel display, turbine, solar, catalyst, steel additive, electronics applications, and others. The Company's operations are subject to numerous and detailed international, national, federal, state and local laws, regulations and permits affecting the mining and mineral processing industry, including those pertaining to employee health and safety, environmental permitting and licensing, air quality standards, greenhouse gas, or GHG, emissions, water usage and disposal, pollution, waste management, plant and wildlife protection, handling and disposal of radioactive substances, remediation of soil and groundwater contamination, land use, reclamation and restoration of properties, the discharge of materials into the environment and groundwater quality and availability.

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