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Canadian Pacific Railway Altman Z-Score

: 2.15 (As of Today)
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Warning Sign:

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
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 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 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 3.86 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.

Trailing Twelve Months (TTM) ended in Jun. 2022:
Total Assets was $54,572 Mil.
Total Current Assets was $1,258 Mil.
Total Current Liabilities was $2,506 Mil.
Retained Earnings was $8,897 Mil.
Pre-Tax Income was 788.81599500156 + 533.17535545024 + 533.59375 + 505.87956751638 = $2,361 Mil.
Interest Expense was -124.96094970322 + -126.38230647709 + -102.34375 + -82.077184121222 = $-436 Mil.
Revenue was 1719.7750702905 + 1451.8167456556 + 1593.75 + 1532.6335727251 = $6,298 Mil.
Market Cap (Today) was $74,776 Mil.
Total Liabilities was $26,913 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
=(1258.2005623243 - 2506.2480474852)/54572.008747266
=-0.0229

X2=Retained Earnings/Total Assets
=8897.2196188691/54572.008747266
=0.163

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(2361.4646679682 - -435.76419030153)/54572.008747266
=0.0513

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=74775.776/26913.464542331
=2.7784

X5=Revenue/Total Assets
=6297.9753886713/54572.008747266
=0.1154

The zones of discrimination were as such:

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.

Read more about Altman Z-Score and the original research.


Be Aware

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 Railway Business Description

Canadian Pacific Railway logo
Traded in Other Exchanges
Address
7550 Ogden Dale Road S.E., Calgary, AB, CAN, T2C 4X9
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.
Executives
Brooks John Kenneth officer: SVP & Chief Marketing Officer 7550 OGDEN DALE ROAD S.E. CALGARY A0 T2C 4X9
Clements James Dominic Luther officer: VP Planning & Transportation 7550 OGDEN DALE ROAD S.E. CALGARY A0 T2C 4X9
Foran Mike officer: VP Network Transportation 7550 OGDEN DALE ROAD S.E. CALGARY A0 T2C 4X9
Trafton Gordon T. Ii director 2632 SUTTON CIRCLE NAPERVILLE IL 60564
Peverett Jane L director 1489 MARINE DRIVE, SUITE 802 WEST VANCOUVER A1 V7T 1B8
Derry John E officer: Vice-President Human Resources 7550 OGDEN DALE ROAD S.E. CALGARY A0 T2C 4X9
Johnson Robert Allen officer: Executive VP Operations 7550 OGDEN DALE ROAD S.E. CALGARY A0 T2C 4X9
Denham Gillian H director C/O CANADIAN PACIFIC RAILWAY LIMITED 7550 OGDEN DALE ROAD S.E. CALGARY A0 T2C 4X9
Fatt William R. director 129 ROCHESTER AVENUE TORONTO A6 M4N 1N9
Velani Nadeem officer: Interim VP and CFO 7550 OGDEN DALE ROAD S. E. CALGARY A0 T2C 4X9
Paull Matthew H director MCDONALDS CORP 2915 JORIE BLVD OAK BROOK IL 60523
Reardon Andrew Fitzpatrick director C/O CANADIAN PACIFIC RAILWAY LIMITED 7550 OGDEN DALE ROAD S.E. CALGARY A0 T2C 4X9
Melman Anthony Ronald director 150 BLOOR STREET WEST TORONTO A6 M5S 2X9
Pitz Laird Joseph officer: VP & Chief Risk Officer 7550 OGDEN DALE ROAD S.E. CALGARY A0 T2C 4X9
Edwards Peter John officer: VP HR & Labour Relations 7550 OGDEN DALE ROAD S.E. CALGARY A0 T2C 4X9

Canadian Pacific Railway Headlines

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