GURUFOCUS.COM » STOCK LIST » Industrials » Aerospace & Defense » Esterline Technologies Corp (NYSE:ESL) » Definitions » Altman Z-Score

Esterline Technologies (Esterline Technologies) Altman Z-Score : 3.98 (As of May. 04, 2024)


View and export this data going back to 1970. Start your Free Trial

What is Esterline Technologies Altman Z-Score?

The Altman Z-Score is a model designed to predict the likelihood of a company going bankrupt within the next two years. Created by American finance professor Edward Altman in 1968, the model is specifically designed for publicly traded manufacturing companies with assets greater than $1 million.

Esterline Technologies has a Altman Z-Score of 3.98, indicating it is in Safe Zones. This implies the Altman Z-Score is strong.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The historical rank and industry rank for Esterline Technologies's Altman Z-Score or its related term are showing as below:


Esterline Technologies Altman Z-Score Historical Data

The historical data trend for Esterline Technologies's Altman Z-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Esterline Technologies Altman Z-Score Chart

Esterline Technologies Annual Data
Trend Oct09 Oct10 Oct11 Oct12 Oct13 Oct14 Sep15 Sep16 Sep17 Sep18
Altman Z-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 3.51 2.62 2.80 3.18 3.37

Esterline Technologies Quarterly Data
Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18
Altman Z-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.93 2.89 3.01 3.37 3.95

Competitive Comparison of Esterline Technologies's Altman Z-Score

For the Aerospace & Defense subindustry, Esterline Technologies's Altman Z-Score, along with its competitors' market caps and Altman Z-Score 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.


Esterline Technologies's Altman Z-Score Distribution in the Aerospace & Defense Industry

For the Aerospace & Defense industry and Industrials sector, Esterline Technologies's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Esterline Technologies's Altman Z-Score falls into.



Esterline Technologies Altman Z-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

Esterline Technologies's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*0.3129+1.4*0.5873+3.3*0.0694+0.6*3.1357+1.0*0.6753
=3.98

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Dec. 2018:
Total Assets was $3,017 Mil.
Total Current Assets was $1,322 Mil.
Total Current Liabilities was $378 Mil.
Retained Earnings was $1,772 Mil.
Pre-Tax Income was 45.163 + 67.074 + 40.969 + 26.206 = $179 Mil.
Interest Expense was -6.774 + -7.242 + -7.902 + -8.167 = $-30 Mil.
Revenue was 484.987 + 535.294 + 499.871 + 517.629 = $2,038 Mil.
Market Cap (Today) was $3,637 Mil.
Total Liabilities was $1,160 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(1322.135 - 378.046)/3017.381
=0.3129

X2=Retained Earnings/Total Assets
=1772.24/3017.381
=0.5873

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(179.412 - -30.085)/3017.381
=0.0694

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=3637.030/1159.875
=3.1357

X5=Revenue/Total Assets
=2037.781/3017.381
=0.6753

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

Esterline Technologies has a Altman Z-Score of 3.98 indicating it is in Safe Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


Esterline Technologies  (NYSE:ESL) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


Esterline Technologies Altman Z-Score Related Terms

Thank you for viewing the detailed overview of Esterline Technologies's Altman Z-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


Esterline Technologies (Esterline Technologies) Business Description

Traded in Other Exchanges
N/A
Address
500, 108th Avenue North East, Suite 1500, Bellevue, WA, USA, 98004
Esterline Technologies Corp is a specialized manufacturing company serving aerospace and defense markets. It designs, produces, and markets engineered products and systems. The company operates in three technology segments: Avionics & Controls, Sensors & Systems, and Advanced Materials. Its products have been implemented into military and commercial aircraft and land-based platforms. Additional sales result from aftermarket repairs and spare parts for existing systems. Esterline has worldwide sales and distribution channels and will try to strengthen customer relationships by targeting specific segments. Approximately half of its revenue is derived from the United States. The remainder of sales come from Canada, France, United Kingdom, and other smaller regions.
Executives
Stephen M Nolan officer: Executive VP, CFO 1300 WILSON BOULEVARD, SUITE 400, ARLINGTON VA 22209
Donald E. Walther officer: Executive VP, General Counsel 500 108TH AVENUE NE, SUITE 1500, BELLEVUE WA 98004
Mary L Howell director 1101 PENNSYLVANIA AVE STE 400, WASHINGTON DC 20004
Curtis C Reusser director, officer: Chairman, President & CEO C/O GOODRICH CORPORATION, 850 LAGOON DRIVE, CHULA VISTA CA 91910
Scott Ernest Kuechle director C/O GOODRICH CORPORATION, 2730 WEST TYVOLA ROAD, CHARLOTTE NC 28217
Michael J Covey director C/O POTLATCH CORPORATION, 601 W FIRST AVENUE, SUITE 1600, SPOKANE WA 99201
Michael J Cave director C/O ESTERLINE TECHNOLOGIES CORP, 500 108TH AVE NE, SUITE 1500, BELLEVUE WA 98004
Steven T Romick 10 percent owner 11400 W OLYMPIC BLVD, STE 1200, LOS ANGELES CA 90064
Mark Landecker 10 percent owner 11400 W. OLYMPIC BLVD., STE. 1200, LOS ANGELES CA 90064
J Richard Atwood 10 percent owner
Brian A. Selmo 10 percent owner 11400 W. OLYMPIC BLVD., STE. 1200, LOS ANGELES CA 90064
Gary E Pruitt director 701 WESTERN AVENUE, GLENDALE CA 91201
Winship Henry Ward Iv director PO BOX 8614, RANCHO SANTA FE CA 92067
Jerry D Leitman director
Richard Bradley Lawrence director, officer: Executive Chairman 500 108TH AVENUE NE, SUITE 1500, BELLEVUE WA 98004