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ServiceNow Altman Z-Score

: 9.80 (As of Today)
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Good Sign:

Altman Z-score of 9.3 is strong.

ServiceNow has a Altman Z-Score of 9.80, indicating it is in Safe Zones. This implies the Altman Z-Score is strong.

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 ServiceNow's Altman Z-Score or its related term are showing as below:

NOW' s Altman Z-Score Range Over the Past 10 Years
Min: 0.73   Med: 7.47   Max: 15.53
Current: 9.3

During the past 12 years, ServiceNow's highest Altman Z-Score was 15.53. The lowest was 0.73. And the median was 7.47.


ServiceNow Altman Z-Score Historical Data

The historical data trend for ServiceNow'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.

ServiceNow 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 5.15 7.39 8.80 11.66 11.60

ServiceNow 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 11.72 13.23 11.60 10.28 9.09

Competitive Comparison

For the Software - Application subindustry, ServiceNow'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.

   

ServiceNow Altman Z-Score Distribution

For the Software industry and Technology sector, ServiceNow's Altman Z-Score distribution charts can be found below:

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



ServiceNow 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.

ServiceNow'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*0.0531+1.4*0.0097+3.3*0.0216+0.6*15.0944+1.0*0.5945
=9.80

* 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 $11,102 Mil.
Total Current Assets was $5,332 Mil.
Total Current Liabilities was $4,743 Mil.
Retained Earnings was $108 Mil.
Pre-Tax Income was 29 + 85 + 32 + 68 = $214 Mil.
Interest Expense was -6 + -6 + -7 + -7 = $-26 Mil.
Revenue was 1752 + 1722 + 1614 + 1512 = $6,600 Mil.
Market Cap (Today) was $104,272 Mil.
Total Liabilities was $6,908 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
=(5332 - 4743)/11102
=0.0531

X2=Retained Earnings/Total Assets
=108/11102
=0.0097

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(214 - -26)/11102
=0.0216

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=104272.400/6908
=15.0944

X5=Revenue/Total Assets
=6600/11102
=0.5945

The zones of discrimination were as such:

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

ServiceNow has a Altman Z-Score of 9.80 indicating it is in Safe Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


ServiceNow  (NYSE:NOW) 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.


ServiceNow Altman Z-Score Related Terms

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


ServiceNow Business Description

ServiceNow logo
Address
2225 Lawson Lane, Santa Clara, CA, USA, 95054
ServiceNow Inc provides software solutions to structure and automate various business processes via a SaaS delivery model. The company primarily focuses on the IT function for enterprise customers. ServiceNow began with IT service management (ITSM), expanded within the IT function, and more recently directed its workflow automation logic to functional areas beyond IT, notably customer service, HR service delivery, and security operations. ServiceNow also offers an application development platform as a service (PaaS).
Executives
Caimi Lara officer: Chief Customer & Partner Ofc C/O CONFLUENT, INC. 899 W EVELYN AVENUE MOUNTAIN VIEW CA 94041
Bedi Christopher officer: Chief Information Officer 2225 LAWSON LANE SANTA CLARA CA 95054
Smith Paul John officer: Chief Commercial Officer 2225 LAWSON LANE SANTA CLARA CA 95054
Mcbride Kevin Thomas officer: Principal Accounting Officer 2200 MISSION COLLEGE BLVD SANTA CLARA CA 95054
Tzitzon Nicholas officer: Chief Strat & Corp Affairs Ofc 2225 LAWSON LANE SANTA CLARA CA 95054
Rathnam Sukumar director 2225 LAWSON LANE SANTA CLARA CA 95054
Canney Jacqueline P officer: Chief People Officer 702 SW 8TH STREET BENTONVILLE AR 72716
Quinlan Larry director 2225 LAWSON LANE SANTA CLARA CA 95054
Toledano Gabrielle B officer: Chief Talent Officer 209 REDWOOD SHORES PARKWAY REDWOOD CITY CA 94065
Jackson Lawrence director 2225 LAWSON LANE SANTA CLARA CA 95054
Haverty Kevin officer: Chief Revenue Officer 2225 LAWSON LANE SANTA CLARA CA 95054
Mastantuono Gina officer: Chief Financial Officer 237 PARK AVENUE 14TH FLOOR NEW YORK NY 10017
Mcdermott William R director, officer: President & CEO C/O UNDER ARMOUR, INC. 1020 HULL STREET, 3RD FLOOR BALTIMORE MD 21230
Goon Fay Sien officer: Principal Accounting Officer 2225 LAWSON LANE SANTA CLARA CA 95054
Briggs Teresa director 2225 LAWSON LANE SANTA CLARA CA 95054

ServiceNow Headlines

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