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FirstEnergy Altman Z-Score

: 0.80 (As of Today)
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Warning Sign:

Altman Z-score of 0.79 is in distress zone. This implies bankruptcy possibility in the next two years.

FirstEnergy has a Altman Z-Score of 0.80, 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 <= 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 FirstEnergy's Altman Z-Score or its related term are showing as below:

FE' s Altman Z-Score Range Over the Past 10 Years
Min: 0.32   Med: 0.74   Max: 1.26
Current: 0.79

During the past 13 years, FirstEnergy's highest Altman Z-Score was 1.26. The lowest was 0.32. And the median was 0.74.


FirstEnergy Altman Z-Score Historical Data

The historical data trend for FirstEnergy'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.

FirstEnergy 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 0.43 0.60 0.67 0.54 0.74

FirstEnergy 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 0.66 0.64 0.74 0.79 0.78

Competitive Comparison

For the Utilities - Regulated Electric subindustry, FirstEnergy'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.

   

FirstEnergy Altman Z-Score Distribution

For the Utilities - Regulated industry and Utilities sector, FirstEnergy's Altman Z-Score distribution charts can be found below:

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



FirstEnergy 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.

FirstEnergy'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*-0.0184+1.4*-0.025+3.3*0.0591+0.6*0.6681+1.0*0.2569
=0.80

* 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 $45,120 Mil.
Total Current Assets was $2,539 Mil.
Total Current Liabilities was $3,370 Mil.
Retained Earnings was $-1,130 Mil.
Pre-Tax Income was 241 + 371 + 479 + 504 = $1,595 Mil.
Interest Expense was -248 + -294 + -265 + -263 = $-1,070 Mil.
Revenue was 2818 + 2989 + 2660 + 3124 = $11,591 Mil.
Market Cap (Today) was $22,587 Mil.
Total Liabilities was $33,806 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
=(2539 - 3370)/45120
=-0.0184

X2=Retained Earnings/Total Assets
=-1130/45120
=-0.025

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(1595 - -1070)/45120
=0.0591

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=22587.256/33806
=0.6681

X5=Revenue/Total Assets
=11591/45120
=0.2569

The zones of discrimination were as such:

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

FirstEnergy has a Altman Z-Score of 0.80 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.


FirstEnergy  (NYSE:FE) 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.


FirstEnergy Altman Z-Score Related Terms

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


FirstEnergy Business Description

FirstEnergy logo
Address
76 South Main Street, Akron, OH, USA, 44308
FirstEnergy is one of the largest investor-owned utilities in the United States with 10 regulated distribution companies across six mid-Atlantic and Midwestern states. FirstEnergy also owns and operates one of the nation's largest electric transmission systems with 24,000 miles of lines.
Executives
Croom Jana T director 1205 KIMBALL BLVD. JASPER IN 47546
Klimczak Sean director C/O THE BLACKSTONE GROUP 345 PARK AVE. NEW YORK NY 10154
Hicks Lisa Winston director 76 S. MAIN ST AKRON OH 44308
Kaleta Paul J director P O BOX 30150 RENO NV 89520
Williams Melvin D. director 76 SOUTH MAIN STREET AKRON OH 44308
Teno Andrew director C/O FIR TREE INC. 55 WEST 46TH STREET, 29TH FLOOR NEW YORK NY 10036
Lynn Jesse director C/O ICAHN ENTERPRISES L.P. 16690 COLLINS AVE., PH SUNNY ISLES FL 33160
Somerhalder John W Ii director, officer: Vice Chair & Exec Director 76 SOUTH MAIN STREET AKRON OH 44308
Park Hyun officer: SVP & CLO 76 SOUTH MAIN STREET AKRON OH 44308
Turner Leslie M director THE HERSHEY COMPANY 100 CRYSTAL A DRIVE HERSHEY PA 17036
Mikkelsen Eileen officer: VP, Rates & Regulatory Affairs 76 SOUTH MAIN STREET AKRON OH 44308
Prezelj Irena officer: VP, Investor Relations 76 SOUTH MAIN STREET AKRON OH 44308
Walker Christine officer: VP, Human Resources 76 SOUTH MAIN STREET AKRON OH 44308
Belcher Samuel officer: SVP & President, FE Utilities 76 SOUTH MAIN STREET AKRON OH 44308
Lisowski Jason officer: VP, Controller & CAO 76 SOUTH MAIN STREET AKRON OH 44333

FirstEnergy Headlines

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