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.
RetailMeNot has a Altman Z-Score of 4.52, 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 RetailMeNot's Altman Z-Score or its related term are showing as below:
RetailMeNot Altman Z-Score Historical Data
The historical data trend for RetailMeNot'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.
Competitive Comparison of RetailMeNot's Altman Z-Score
For the Internet Content & Information subindustry, RetailMeNot'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.
RetailMeNot's Altman Z-Score Distribution in the Interactive Media Industry
For the Interactive Media industry and Communication Services sector, RetailMeNot's Altman Z-Score distribution charts can be found below:
* The bar in red indicates where RetailMeNot's Altman Z-Score falls into.
RetailMeNot 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.
RetailMeNot'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
*
0.4535
+
1.4
*
-0.0044
+
3.3
*
0.0094
+
0.6
*
5.7179
+
1.0
*
0.5161
=
4.52
* 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.
Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones
RetailMeNot has a Altman Z-Score of 4.52 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.
RetailMeNot (NAS:SALE) 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.
Altman Z-Score does not apply to financial companies.
RetailMeNot Altman Z-Score Related Terms
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RetailMeNot Inc was formed in September 2007. The Company operates a digital savings destination connecting consumers with retailers, restaurants and brands, both online and in-store. Digital offers are offers, offer codes and brand or category specific discounts made available online or through mobile applications that are used by consumers to make online or in-store purchases directly from retailers. Digital offers can include coupons, sales, consumer tips, advertisements, discounted digital gift cards redeemable at retailers or cash-back rebates associated with the purchase of a product or a consumer action. The Company's websites, mobile applications, email newsletters and alerts and social media presence enable consumers to search for, discover and redeem hundreds of thousands of relevant digital offers from retailers and brands. Its marketplace features digital offers across multiple product categories, including clothing; electronics; health and beauty; home and office; travel, dining and entertainment; personal and business services; and shoes. The Company provides its retailers and brands access to consumer. Its product development approach is centered on building products that enable consumers to discover quality digital offers, virtually anytime and anywhere, and redeem them online or in-store. The Company's products and services for consumers are free of charge and available through its websites and mobile applications. The Company offers its consumers hundreds of thousands of digital offers from tens of thousands of retailers and brands across multiple product categories. Its mobile applications allow consumers to shop when and where consumer want. Consumers use the mobile applications to discover, store for use later and access the digital offers it wants and to redeem them both online and in-store. The consumers can browse top digital offers, popular stores and product category listings. The Company's mobile applications also allow users to share digital offers with others via email, text message or through social media channels. Its competitors include Goodsearch, bradsdeals, savings.com, Tech Bargains and Coupon Cabin, Groupon, Living Social, Coupons.com and PayPal. The Company's operations are subject to general business regulations and laws as well as regulations and laws specifically governing the Internet, e-commerce and mobile commerce, or m-commerce, in a number of jurisdictions around the world.
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