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Insmed Altman Z-Score

: 1.79 (As of Today)
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Warning Sign:

Altman Z-score of 1.79 is in distress zone. This implies bankrupcy possibility in the next two years.

Insmed has a Altman Z-Score of 1.79, 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 is less than 1.81, it is in Distress Zones.
When Altman Z-Score is greater than 2.99, it is in Safe Zones.
When Altman Z-Score is between 1.81 and 2.99, it is in Grey Zones.

NAS:INSM' s Altman Z-Score Range Over the Past 10 Years
Min: -95.47   Med: 2.91   Max: 55.55
Current: 1.79
-95.47
55.55

During the past 13 years, Insmed's highest Altman Z-Score was 55.55. The lowest was -95.47. And the median was 2.91.

Insmed Altman Z-Score 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.

Insmed Annual Data
Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19
Altman Z-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 12.49 -0.30 8.21 -2.18 -0.29

Insmed Quarterly Data
Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20
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 0.30 -0.88 -0.29 -1.57 1.10
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.

Insmed Altman Z-Score Distribution

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


Insmed 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.

Insmed'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*0.7099+1.4*-1.8803+3.3*-0.2409+0.6*6.9698+1.0*0.1852
=1.79

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Jun. 2020:
Total Assets was $885.4 Mil.
Total Current Assets was $707.3 Mil.
Total Current Liabilities was $78.8 Mil.
Retained Earnings was $-1,664.7 Mil.
Pre-Tax Income was -61.426 + -66.328 + -52.664 + -60.534 = $-241.0 Mil.
Interest Expense was -7.12 + -7.062 + -6.998 + -6.497 = $-27.7 Mil.
Revenue was 42.495 + 36.86 + 45.708 + 38.885 = $163.9 Mil.
Market Cap (Today) was $3,345.8 Mil.
Total Liabilities was $480.0 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
=(707.312 - 78.754)/885.365
=0.7099

X2=Retained Earnings/Total Assets
=-1664.717/885.365
=-1.8803

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(-240.952 - -27.677)/885.365
=-0.2409

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=3345.828/480.047
=6.9698

X5=Revenue/Total Assets
=163.948/885.365
=0.1852

The zones of discrimination were as such:

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

Insmed has a Altman Z-Score of 1.79 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.

Insmed  (NAS:INSM) 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.

Insmed Altman Z-Score Related Terms

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