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Arrow Electronics (Arrow Electronics) Altman Z-Score

: 2.66 (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 2.66 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.

Arrow Electronics has a Altman Z-Score of 2.66, indicating it is in Grey Zones. This implies that Arrow Electronics is in some kind of financial stress. If it is below 1.81, the company may face bankrupcy risk.

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 Arrow Electronics's Altman Z-Score or its related term are showing as below:

ARW' s Altman Z-Score Range Over the Past 10 Years
Min: 2.66   Med: 3.06   Max: 3.26
Current: 2.66

During the past 13 years, Arrow Electronics's highest Altman Z-Score was 3.26. The lowest was 2.66. And the median was 3.06.


Arrow Electronics Altman Z-Score Historical Data

The historical data trend for Arrow Electronics'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.

Arrow Electronics 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 2.97 3.06 3.26 3.17 2.66

Arrow Electronics 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 3.17 3.47 3.41 3.20 2.66

Competitive Comparison

For the Electronics & Computer Distribution subindustry, Arrow Electronics'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.


Arrow Electronics Altman Z-Score Distribution

For the Hardware industry and Technology sector, Arrow Electronics's Altman Z-Score distribution charts can be found below:

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



Arrow Electronics 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.

Arrow Electronics'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*0.2366+1.4*0.2665+3.3*0.0687+0.6*0.4156+1.0*1.5238
=2.66

* 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 $21,726 Mil.
Total Current Assets was $18,327 Mil.
Total Current Liabilities was $13,188 Mil.
Retained Earnings was $5,790 Mil.
Pre-Tax Income was 250.029 + 252.282 + 310.171 + 351.872 = $1,164 Mil.
Interest Expense was -82.052 + -82.18 + -84.834 + -79.658 = $-329 Mil.
Revenue was 7849.157 + 8007.019 + 8514.516 + 8736.428 = $33,107 Mil.
Market Cap (Today) was $6,588 Mil.
Total Liabilities was $15,849 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
=(18327.477 - 13187.884)/21726.168
=0.2366

X2=Retained Earnings/Total Assets
=5790.217/21726.168
=0.2665

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(1164.354 - -328.724)/21726.168
=0.0687

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=6587.558/15848.861
=0.4156

X5=Revenue/Total Assets
=33107.12/21726.168
=1.5238

The zones of discrimination were as such:

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

Arrow Electronics has a Altman Z-Score of 2.66 indicating it is in Grey Zones.

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


Arrow Electronics  (NYSE:ARW) 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.


Arrow Electronics Altman Z-Score Related Terms

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


Arrow Electronics (Arrow Electronics) Business Description

Traded in Other Exchanges
Address
9201 East Dry Creek Road, Centennial, CO, USA, 80112
Arrow Electronics Inc. is a provider of products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions. It has one of the world's broadest portfolios of product offerings available from electronic components and enterprise computing solutions suppliers, coupled with a range of services, solutions, and software, the company helps industrial and commercial customers introduce products, reduce their time to market, and enhance their overall competitiveness. The company has two business segments, the components business and the enterprise computing solutions.
Executives
Richard John Marano officer: President, Global Components 9201 E DRY CREEK ROAD, CENTENNIAL CO 80112
Gail Hamilton director 20330 STEVENS CREEK BLVD., CUPERTINO CA 95014
Kirk Schell officer: President, Global Components 9201 E DRY CREEK ROAD, CENTENNIAL CO 80112
Gretchen Zech officer: SVP, Global Human Resources 9201 E DRY CREEK RD, CENTENNIAL CO 80112
Andrew Charles Kerin director C/O ARAMARK CORPORATION, 1101 MARKET STREET, PHILADELPHIA PA 19107
Mary T Mcdowell director
Michael J Long director, officer: Chairman, President & CEO 9201 EAST DRY CREEK ROAD, CENTENNIAL CO 80112
Kristin Diana Russell officer: President, Global ECS 9201 E. DRY CREEK RD., CENTENNIAL CO 80112
Vincent P Melvin officer: Chief Information Officer ARROW ELECTRONICS, INC., 9201 EAST DRY CREEK ROAD, CENTENNIAL CO 80112
Rajesh K. Agrawal officer: SVP, Chief Financial Officer 9201 E. DRY CREEK RD., CENTENNIAL CO 80112
Carine Lamercie Jean-claude officer: SVP, Chief Legal Officer 9201 E. DRY CREEK RD., CENTENNIAL CO 80112
David Alan West officer: President, Global Components 9201 E. DRY CREEK RD., CENTENNIAL CO 80112
Christopher Stansbury officer: SVP & Chief Financial Officer C/O ARROW ELECTRONICS, INC, 9201 EAST DRY CREEK ROAD, CENTENNIAL CO 80112
Charles Ii Kostalnick officer: Chief Supply Chain Officer 2700 NORTH FIRST STREET, SAN JOSE CA 95134
Carol P Lowe director 4311 BEULAH CHURCH ROAD, WEDDINGTON NC 28104