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TE Connectivity (NYSE:TEL) Altman Z-Score

: 4.82 (As of Today)
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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.

Good Sign:

Altman Z-score of 4.83 is strong.

TE Connectivity has a Altman Z-Score of 4.82, 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 TE Connectivity's Altman Z-Score or its related term are showing as below:

TEL' s Altman Z-Score Range Over the Past 10 Years
Min: 2.74   Med: 3.87   Max: 5.16
Current: 4.83

During the past 13 years, TE Connectivity's highest Altman Z-Score was 5.16. The lowest was 2.74. And the median was 3.87.


TE Connectivity Altman Z-Score Historical Data

The historical data trend for TE Connectivity'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.

TE Connectivity Annual Data
Trend Sep14 Sep15 Sep16 Sep17 Sep18 Sep19 Sep20 Sep21 Sep22 Sep23
Altman Z-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.07 3.60 4.49 4.38 4.42

TE Connectivity 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 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 4.40 4.48 4.68 4.42 4.79

Competitive Comparison

For the Electronic Components subindustry, TE Connectivity'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.


TE Connectivity Altman Z-Score Distribution

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

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



TE Connectivity 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.

TE Connectivity'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*0.1487+1.4*0.6362+3.3*0.1109+0.6*4.4892+1.0*0.6946
=4.82

* 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 $23,071 Mil.
Total Current Assets was $7,441 Mil.
Total Current Liabilities was $4,011 Mil.
Retained Earnings was $14,678 Mil.
Pre-Tax Income was 699 + 634 + 624 + 525 = $2,482 Mil.
Interest Expense was -18 + -19 + -20 + -20 = $-77 Mil.
Revenue was 3831 + 4035 + 3998 + 4160 = $16,024 Mil.
Market Cap (Today) was $44,093 Mil.
Total Liabilities was $9,822 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
=(7441 - 4011)/23071
=0.1487

X2=Retained Earnings/Total Assets
=14678/23071
=0.6362

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(2482 - -77)/23071
=0.1109

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=44093.407/9822
=4.4892

X5=Revenue/Total Assets
=16024/23071
=0.6946

The zones of discrimination were as such:

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

TE Connectivity has a Altman Z-Score of 4.82 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.


TE Connectivity  (NYSE:TEL) 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.


TE Connectivity Altman Z-Score Related Terms

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TE Connectivity (NYSE:TEL) Business Description

Traded in Other Exchanges
N/A
Address
Muhlenstrasse 26, Schaffhausen, CHE, CH-8200
TE Connectivity is the largest electrical connector supplier in the world, supplying interconnect and sensor solutions to the transportation, industrial, and communications markets. With operations in 150 countries and over 500,000 stock-keeping units, TE has a broad portfolio that forms the electrical architecture of its end customers' cutting-edge innovations.
Executives
Terrence R Curtin director, officer: EVP & Chief Financial Officer C/O TYCO ELECTRONICS LTD., 1050 WESTLAKES DRIVE, BERWYN PA 19312
John S Jenkins officer: EVP & General Counsel 1050 WESTLAKES DRIVE, BERWYN PA 19312
Heath A Mitts officer: EVP & Chief Financial Officer 1925 WEST FIELD COURT, SUITE 200, LAKE FOREST IL 60045
Malavika Sagar officer: SVP, Chief Human Resources Off 1050 WESTLAKES DRIVE, BERWYN PA 19312
Jean-pierre Clamadieu director 1050 WESTLAKES DRIVE, BERWYN PA 19312
Shadrak W Kroeger officer: Pres., Communications Solution 1050 WESTLAKES DRIVE, BERWYN PA 19312
Abhijit Y Talwalkar director ONE AMD PLACE, PO BOX 3453, SUNNYVALE CA 94088
Tim Murphy officer: SVP & CHRO 1050 WESTLAKES DRIVE, BERWYN PA 19312
Thomas J Lynch director, officer: Chief Executive Officer 7 LAKEVIEW DRIVE, NEWTOWN PA 19840
Syaru Shirley Lin director
Robert J Ott officer: Sr VP & Controller C/O TYCO ELECTRONICS LTD, 1050 WESTLAKES DRIVE, BERWYN PA 19312
Steven T Merkt officer: President, Transportation Sol. 1050 WESTLAKES DRIVE, BERWYN PA 19312
Daniel J Phelan director C/O TYCO ELECTRONICS LTD., 1050 WESTLAKES DRIVE, BERWYN PA 19312
Aaron Kyle Stucki officer: Pres. Communications Solutions 1050 WESTLAKES DRIVE, BERWYN PA 19312
Eric Resch director, officer: SVP and Tax Officer C/O TYCO ELECTRONICS LTD., 1050 WESTLAKES DRIVE, BERWYN PA 19312