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Lumen Technologies (NYSE:LUMN) Altman Z-Score

: -1.12 (As of Today)
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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.

Warning Sign:

Altman Z-score of -1.12 is in distress zone. This implies bankruptcy possibility in the next two years.

Lumen Technologies has a Altman Z-Score of -1.12, 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 Lumen Technologies's Altman Z-Score or its related term are showing as below:

LUMN' s Altman Z-Score Range Over the Past 10 Years
Min: -1.12   Med: 0.51   Max: 0.9
Current: -1.12

During the past 13 years, Lumen Technologies's highest Altman Z-Score was 0.90. The lowest was -1.12. And the median was 0.51.


Lumen Technologies Altman Z-Score Historical Data

The historical data trend for Lumen 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.

Lumen Technologies Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Altman Z-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.17 0.27 0.69 0.28 -1.11

Lumen Technologies Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
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 0.28 0.22 -0.93 -1.09 -1.11

Competitive Comparison

For the Telecom Services subindustry, Lumen 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.


Lumen Technologies Altman Z-Score Distribution

For the Telecommunication Services industry and Communication Services sector, Lumen Technologies's Altman Z-Score distribution charts can be found below:

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



Lumen 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.

Lumen 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*0.0365+1.4*-0.5264+3.3*-0.2669+0.6*0.0476+1.0*0.4279
=-1.12

* 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. 2023:
Total Assets was $34,018 Mil.
Total Current Assets was $4,775 Mil.
Total Current Liabilities was $3,534 Mil.
Retained Earnings was $-17,907 Mil.
Pre-Tax Income was -2142 + -85 + -8690 + 680 = $-10,237 Mil.
Interest Expense was -290 + -295 + -294 + -279 = $-1,158 Mil.
Revenue was 3517 + 3641 + 3661 + 3738 = $14,557 Mil.
Market Cap (Today) was $1,599 Mil.
Total Liabilities was $33,601 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
=(4775 - 3534)/34018
=0.0365

X2=Retained Earnings/Total Assets
=-17907/34018
=-0.5264

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(-10237 - -1158)/34018
=-0.2669

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=1599.048/33601
=0.0476

X5=Revenue/Total Assets
=14557/34018
=0.4279

The zones of discrimination were as such:

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

Lumen Technologies has a Altman Z-Score of -1.12 indicating it is in Distress Zones.

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


Lumen Technologies  (NYSE:LUMN) 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.


Lumen Technologies Altman Z-Score Related Terms

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


Lumen Technologies (NYSE:LUMN) Business Description

Address
100 CenturyLink Drive, Monroe, LA, USA, 71203
With 450,000 route miles of fiber, including over 35,000 route miles of subsea fiber connecting Europe, Asia, and Latin America, Lumen Technologies is one of the United States' largest telecommunications carriers serving global enterprises. Its merger with Level 3 in 2017 and divestiture of much of its incumbent local exchange carrier, or ILEC, business in 2022 has shifted the company's operations away from its legacy consumer business and toward enterprises (now nearly 80% of revenue). Lumen offers businesses a full menu of communications services, providing colocation and data center services, data transportation, and end-user phone and internet service. On the consumer side, Lumen provides broadband and phone service across 37 states, where it has 4.5 million broadband customers.
Executives
James Fowler director 100 CENTURYLINK DRIVE, MONROE LA 71203
Christopher Stansbury officer: EVP and CFO C/O ARROW ELECTRONICS, INC, 9201 EAST DRY CREEK ROAD, CENTENNIAL CO 80112
Kathleen E Johnson director, officer: President & CEO 55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328
Quincy L Allen director 6600 NORTH MILITARY TRAIL, LEGAL DEPARTMENT, BOCA RATON FL 33496
Ashley Haynes-gaspar officer: EVP and Customer Exp Officer 100 CENTURYLINK DRIVE, MONROE LA 71203
Kevin P. Chilton director 1201 LAKE ROBBINS DRIVE, THE WOODLANDS TX 77380
Laurie Siegel director C/O VOLT INFORMATION SCIENCES, INC., 1133 AVENUE OF THE AMERICAS, 15TH FLOOR, NEW YORK NY 10036
Peter C Brown director 909 WALNUT STE 200, KANSAS CITY MO 64106
Scott Trezise officer: EVP, Human Resources 100 CENTURYLINK DRIVE, MONROE LA 71203
Shaun C Andrews officer: Exec VP & Chief Mktg Officer 100 CENTURYLINK DRIVE, MONROE LA 71203
Sham Chotai officer: EVP, Product and IT 10201 TORRE AVENUE, SUITE 350, CUPERTINO CA 95014
Michael James Roberts director ONE MCDONALD'S PLAZA, OAK BROOK IL 60523
Steven T Clontz director 781 THIRD AVENUE, KING OF PRUSSIA PA 19406-1409
Martha Helena Bejar director C/O POLYCOM, INC., 6001 AMERICA CENTER DRIVE, SAN JOSE CA 95002
Hal Jones director 1150 15TH STREET, NW, WASHINGTON DC 20071