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Keurig Green Mountain Inc  (NAS:GMCR) Altman Z-Score: 8.57 (As of Today)

Keurig Green Mountain Inc has a Z-score of 8.57, indicating it is in Safe Zones. This implies the Z-Score is strong.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Keurig Green Mountain Inc Annual Data

Sep06 Sep07 Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15
Altman Z-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 8.33 3.78 8.62 11.99 6.44

Keurig Green Mountain Inc Quarterly Data

Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15
Altman Z-Score 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 Premium Member Only Premium Member Only Premium Member Only 12.30 10.42 8.71 6.44 8.43

Competitive Comparison
* 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.


Calculation

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.

Keurig Green Mountain Inc'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*0.2372+1.4*0.5266+3.3*0.1789+0.6*9.7355+1.0*1.1172
=8.57

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Trailing Twelve Months (TTM) ended in Dec. 2015:
Total Assets was $3,931 Mil.
Total Current Assets was $1,512 Mil.
Total Current Liabilities was $579 Mil.
Retained Earnings was $2,070 Mil.
Pre-Tax Income was 158.932 + 139.788 + 162.862 + 238.631 = $700 Mil.
Interest Expense was -2.244 + -0.128 + -0.386 + -0.281 = $-3 Mil.
Revenue was 1258.421 + 1036.964 + 969.525 + 1127.184 = $4,392 Mil.
Market Cap (M) (Today) was $13,744 Mil.
Total Liabilities was $1,412 Mil.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(1511.924 - 579.47)/3931.453
=0.2372

X2=Retained Earnings/Total Assets
=2070.319/3931.453
=0.5266

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income + Interest Expense)/Total Assets
=(700.213 + -3.039)/3931.453
=0.1789

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap (M)/Total Liabilities
=13744.450/1411.792
=9.7355

X5=Revenue/Total Assets
=4392.094/3931.453
=1.1172

The zones of discrimination were as such:

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

Keurig Green Mountain Inc has a Z-score of 8.57 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.


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

Z score does not apply to financial companies.


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