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Shell Altman Z-Score

: 2.26 (As of Today)
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Warning Sign:

Altman Z-score of 2.23 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.

Shell has a Altman Z-Score of 2.26, indicating it is in Grey Zones. This implies that Shell 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 Shell's Altman Z-Score or its related term are showing as below:

SHEL' s Altman Z-Score Range Over the Past 10 Years
Min: 0.96   Med: 2.54   Max: 3.38
Current: 2.23

During the past 13 years, Shell's highest Altman Z-Score was 3.38. The lowest was 0.96. And the median was 2.54.


Shell Altman Z-Score Historical Data

The historical data trend for Shell'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.

Shell 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 2.41 2.68 2.41 1.24 1.96

Shell 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 1.66 1.65 1.96 2.08 2.21

Competitive Comparison

For the Oil & Gas Integrated subindustry, Shell'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.

   

Shell Altman Z-Score Distribution

For the Oil & Gas industry and Energy sector, Shell's Altman Z-Score distribution charts can be found below:

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



Shell 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.

Shell'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*0.1039+1.4*0.3708+3.3*0.131+0.6*0.7538+1.0*0.7359
=2.26

* 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 $447,898 Mil.
Total Current Assets was $165,224 Mil.
Total Current Liabilities was $118,678 Mil.
Retained Earnings was $166,072 Mil.
Pre-Tax Income was 26160 + 10776 + 16269 + 1193 = $54,398 Mil.
Interest Expense was -695 + -1768 + -963 + -859 = $-4,285 Mil.
Revenue was 100059 + 84204 + 85280 + 60044 = $329,587 Mil.
Market Cap (Today) was $191,165 Mil.
Total Liabilities was $253,597 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
=(165224 - 118678)/447898
=0.1039

X2=Retained Earnings/Total Assets
=166072/447898
=0.3708

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(54398 - -4285)/447898
=0.131

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=191164.905/253597
=0.7538

X5=Revenue/Total Assets
=329587/447898
=0.7359

The zones of discrimination were as such:

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

Shell has a Altman Z-Score of 2.26 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.


Shell  (NYSE:SHEL) 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.


Shell Altman Z-Score Related Terms

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


Shell Business Description

Shell logo
Address
Carel van Bylandtlaan 30, The Hague, NLD, 2596 HR
Shell is an integrated oil and gas company that explores for, produces, and refines oil around the world. In 2020, it produced 1.8 million barrels of liquids and 9.2 billion cubic feet of natural gas per day. At year-end 2020, reserves stood at 9.0 billion barrels of oil equivalent, 52% of which consisted of liquids. Its production and reserves are in Europe, Asia, Oceania, Africa, and North and South America. The company operates refineries with capacity of 2.8 mmb/d located in the Americas, Asia, Africa, and Europe and sells 15 mtpa of chemicals. Its largest chemical plants, often integrated with its local refineries, are in Central Europe, China, Singapore, and North America.

Shell Headlines

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