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.
Freescale Semiconductor has a Altman Z-Score of -1.74, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.
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 Freescale Semiconductor's Altman Z-Score or its related term are showing as below:
Freescale Semiconductor Altman Z-Score Historical Data
* 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.
Competitive Comparison of Freescale Semiconductor's Altman Z-Score
For the Semiconductors subindustry, Freescale Semiconductor'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.
Freescale Semiconductor's Altman Z-Score Distribution in the Semiconductors Industry
For the Semiconductors industry and Technology sector, Freescale Semiconductor's Altman Z-Score distribution charts can be found below:
* The bar in red indicates where Freescale Semiconductor's Altman Z-Score falls into.
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.
* 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.
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.
Altman Z-Score does not apply to financial companies.
Freescale Semiconductor Altman Z-Score Related Terms
Thank you for viewing the detailed overview of Freescale Semiconductor's Altman Z-Score provided by GuruFocus.com. Please click on the following links to see related term pages.
Freescale Semiconductor (Freescale Semiconductor) Business Description
Freescale Semiconductor Ltd was incorporated in Delaware on December 3, 2003. The Company provides embedded processors such as microcontrollers and digital networking processors. Its embedded processors, along with its analog, sensor and radio frequency devices, as well as a full suite of software and design tools, it provides integrated embedded processing solutions. The Company's business is organized around five principal product groups: Microcontrollers, Digital Networking, Automotive Microcontrollers, Analog and Sensors, and Radio Frequency. The Company's embedded processor products include Microcontrollers, single and multicore MPUs, Digital Signal Controllers, applications processors and Digital Signal Processors. It also offers Radio Frequency, power management, motor drivers, high voltage actuators, analog, mixed-signal devices and precision sensors. The Company's Communications Processors product portfolio includes 32-bit and 64-bit offerings ranging from a single core to 28- and 45-nanometer multicore QorIQ communications processors. It's Microcontrollers product portfolio ranges from ultra-low power, low-end 8-bit products to higher performance 16-bit and 32-bit products with on-board flash memory such as the Qorivva product line. Its wireless products utilize and support multiple standards and frequencies, including the IEEE standard 802.15.4, and sub-1 GHz solutions in its solutions for medical devices, smart meters and smart energy, consumer appliances, Radio Frequency remote controls and home automation. The Company provides Applications Processors such as ARM-based i.MX application processors with integrated audio, video and graphics capability. Its Digital Signal Processors product portfolio includes single-core to multicore based on the StarCore architecture. Its Analog and Mixed-Signal products portfolio includes driving actuators such as in motors, valves, and lights, switching large currents, regulating power to electronic components in a system, charging and cell balancing batteries and providing precision sense and control interfaces for complex analog systems. The Company's Xtrinsic smart sensor platforms combine inertial sensors and embedded processors with connectivity and power management supported by a reference software toolset. The Company's Radio Frequency power portfolio includes solutions from 1 watt to more than 1 kilowatt. Its low power portfolio provides a mix of Radio Frequency small signal and low power products. The Company sells its products directly to OEMs, distributors, original design manufacturers and contract manufacturers. It owns and operates five manufacturing facilities, of which three are wafer fabrication facilities and two are assembly and test facilities.
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