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InterContinental Hotels Group Altman Z-Score

: 2.99 (As of Today)
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Warning Sign:

Altman Z-score of 2.96 is in grey area. The implies that the company is in some kind of financial stress. If it is below 1.8, the company may faces bankrupcy risk.

InterContinental Hotels Group has a Altman Z-Score of 2.99, indicating it is in Grey Zones. This implies that InterContinental Hotels Group 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 is less than 1.81, it is in Distress Zones.
When Altman Z-Score is greater than 2.99, it is in Safe Zones.
When Altman Z-Score is between 1.81 and 2.99, it is in Grey Zones.

NYSE:IHG' s Altman Z-Score Range Over the Past 10 Years
Min: 0.59   Med: 3.17   Max: 4.58
Current: 2.96

0.59
4.58

During the past 13 years, InterContinental Hotels Group's highest Altman Z-Score was 4.58. The lowest was 0.59. And the median was 3.17.


InterContinental Hotels Group Altman Z-Score Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

InterContinental Hotels Group Annual Data
Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19
Altman Z-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.49 4.00 3.72 3.07 3.23

InterContinental Hotels Group Semi-Annual Data
Dec11 Mar12 Jun12 Sep12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17 Dec17 Jun18 Dec18 Jun19 Dec19 Jun20
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 0.00 3.07 0.00 3.23 0.00

Competitive Comparison
* 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.


InterContinental Hotels Group Altman Z-Score Distribution

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



InterContinental Hotels Group 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.

InterContinental Hotels Group'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*-0.1137+1.4*0.2035+3.3*0.165+0.6*1.8821+1.0*1.1637
=2.99

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Dec. 2019:
Total Assets was $3,976 Mil.
Total Current Assets was $935 Mil.
Total Current Liabilities was $1,387 Mil.
Retained Earnings was $809 Mil.
Pre-Tax Income was $542 Mil.
Interest Expense was $-114 Mil.
Revenue was $4,627 Mil.
Market Cap (Today) was $10,241 Mil.
Total Liabilities was $5,441 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
=(935 - 1387)/3976
=-0.1137

X2=Retained Earnings/Total Assets
=809/3976
=0.2035

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(542 - -114)/3976
=0.165

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=10240.598/5441
=1.8821

X5=Revenue/Total Assets
=4627/3976
=1.1637

The zones of discrimination were as such:

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

InterContinental Hotels Group has a Altman Z-Score of 2.99 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.


InterContinental Hotels Group  (NYSE:IHG) 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.


InterContinental Hotels Group Altman Z-Score Related Terms


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