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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 2.97 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.
Leidos Holdings has a Altman Z-Score of 2.98, indicating it is in Grey Zones. This implies that Leidos Holdings 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 Leidos Holdings's Altman Z-Score or its related term are showing as below:
During the past 13 years, Leidos Holdings's highest Altman Z-Score was 3.13. The lowest was 1.71. And the median was 2.47.
The historical data trend for Leidos Holdings'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.
Leidos Holdings Annual Data | |||||||||||||||||||||
Trend | Jan14 | Jan15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Altman Z-Score | Get a 7-Day Free Trial | 3.13 | 2.47 | 2.39 | 2.59 | 2.78 |
Leidos Holdings 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 | Get a 7-Day Free Trial | 2.59 | 2.57 | 2.64 | 2.54 | 2.78 |
For the Information Technology Services subindustry, Leidos Holdings'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.
For the Software industry and Technology sector, Leidos Holdings's Altman Z-Score distribution charts can be found below:
* The bar in red indicates where Leidos Holdings's Altman Z-Score falls into.
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.
Leidos Holdings'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 | * | 0.08 | + | 1.4 | * | 0.1862 | + | 3.3 | * | 0.0484 | + | 0.6 | * | 2.0786 | + | 1.0 | * | 1.2161 | |
= | 2.98 |
* 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 $12,695 Mil.
Total Current Assets was $4,005 Mil.
Total Current Liabilities was $2,990 Mil.
Retained Earnings was $2,364 Mil.
Pre-Tax Income was 310 + -388 + 274 + 207 = $403 Mil.
Interest Expense was -49 + -53 + -56 + -54 = $-212 Mil.
Revenue was 3980 + 3921 + 3838 + 3699 = $15,438 Mil.
Market Cap (Today) was $17,537 Mil.
Total Liabilities was $8,437 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 | |
= | (4005 - 2990) | / | 12695 | |
= | 0.08 |
X2 | = | Retained Earnings | / | Total Assets |
= | 2364 | / | 12695 | |
= | 0.1862 |
X3 | = | Earnings Before Interest and Taxes | / | Total Assets |
= | (Pre-Tax Income - Interest Expense) | / | Total Assets | |
= | (403 - -212) | / | 12695 | |
= | 0.0484 |
X4 | = | Market Value Equity | / | Book Value of Total Liabilities |
= | Market Cap | / | Total Liabilities | |
= | 17537.174 | / | 8437 | |
= | 2.0786 |
X5 | = | Revenue | / | Total Assets |
= | 15438 | / | 12695 | |
= | 1.2161 |
The zones of discrimination were as such:
Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones
Leidos Holdings has a Altman Z-Score of 2.98 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.
Leidos Holdings (NYSE:LDOS) 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.
Thank you for viewing the detailed overview of Leidos Holdings's Altman Z-Score provided by GuruFocus.com. Please click on the following links to see related term pages.
Surya N Mohapatra | director | 3 GIRALDA FARMS, MADISON NJ 07940 |
Miriam E John | director | 7011 EAST AVENUE, LIVERMORE CA 94550 |
Noel B Williams | director | 1750 PRESIDENTS STREET, RESTON VA 20190 |
James Robert Moos | officer: Group President | 11951 FREEDOM DRIVE, RESTON VA 20190 |
Cindy Gruensfelder | officer: Executive Vice President | 1750 PRESIDENTS STREET, RESTON VA 20190 |
Roy E Stevens | officer: Chief of Business Development | 11951 FREEDOM DRIVE, RESTON VA 20190 |
Kraemer Harry M Jansen Jr | director | DENTSPLY SIRONA INC., 13320 BALLANTYNE CORPORATE PLACE, CHARLOTTE NC 28277 |
Thomas Arthur Bell | director, officer: CEO | 1750 PRESIDENTS STREET, RESTON VA 20190 |
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Gregory R Dahlberg | director | 11951 FREEDOM DRIVE, RESTON VA 20190 |
Howe Jerald S Jr | officer: Executive VP & General Counsel | |
Robert S Shapard | director | P O BOX 696000, SANANTONIO TX 782696000 |
David G Fubini | director | D.G. FUBINI CONSULTANTS, LLC, 80 SEARS ROAD, BROOKLINE MA 02445 |
Christopher R Cage | officer: SVP and Corporate Comptroller | 11951 FREEDOM DRIVE, RESTON VA 20190 |
Roger A Krone | director, officer: CEO |
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