Altman Z-score of 2.16 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.
Canadian Pacific Railway has a Altman Z-Score of 2.15, indicating it is in Grey Zones. This implies that Canadian Pacific Railway 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 Canadian Pacific Railway's Altman Z-Score or its related term are showing as below:
CP'
s Altman Z-Score Range Over the Past 10 Years
Min: 0.71 Med: 1.97 Max: 3.86
Current: 2.16
During the past 13 years, Canadian Pacific Railway's highest Altman Z-Score was 3.86. The lowest was 0.71. And the median was 1.97.
Canadian Pacific Railway Altman Z-Score Historical Data
The historical data trend for Canadian Pacific Railway'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.
Canadian Pacific Railway Annual Data
Trend
Dec12
Dec13
Dec14
Dec15
Dec16
Dec17
Dec18
Dec19
Dec20
Dec21
Altman Z-Score
2.65
2.60
3.07
3.41
1.97
Canadian Pacific Railway Quarterly Data
Sep17
Dec17
Mar18
Jun18
Sep18
Dec18
Mar19
Jun19
Sep19
Dec19
Mar20
Jun20
Sep20
Dec20
Mar21
Jun21
Sep21
Dec21
Mar22
Jun22
Altman Z-Score
3.86
3.23
1.97
2.22
1.94
Competitive Comparison
For the Railroads subindustry, Canadian Pacific Railway'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.
Canadian Pacific Railway Altman Z-Score Distribution
For the Transportation industry and Industrials sector, Canadian Pacific Railway's Altman Z-Score distribution charts can be found below:
* The bar in red indicates where Canadian Pacific Railway's Altman Z-Score falls into.
Canadian Pacific Railway 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.
Canadian Pacific Railway'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
*
-0.0229
+
1.4
*
0.163
+
3.3
*
0.0513
+
0.6
*
2.7784
+
1.0
*
0.1154
=
2.15
* 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
Canadian Pacific Railway has a Altman Z-Score of 2.15 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.
Canadian Pacific Railway (NYSE:CP) 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.
Canadian Pacific Railway Altman Z-Score Related Terms
Thank you for viewing the detailed overview of Canadian Pacific Railway's Altman Z-Score provided by GuruFocus.com. Please click on the following links to see related term pages.
Canadian Pacific is a CAD 8 billion Class-1 railroads operating on more than 12,500 miles of track across most of Canada and into parts of the Midwestern and Northeastern United States. It is the second-smallest Class I railroad by revenue and route miles. In 2021, CP hauled shipments of grain (22% of freight revenue), intermodal containers (22%), energy products (like crude and frac sand), chemicals, and plastics (20%) coal (8%), fertilizer and potash (10%), automotive products (5%), and a diverse mix of other merchandise.
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