Probability Of Bankruptcy

Investor Education Probability Of Bankruptcy is used to show its chance of financial distress over the next two years of operations under current economic and market conditions. Investor Education Probability Of Bankruptcy is determined by interpolating and adjusting Investor Altman Z Score to account for off-balance-sheet items and missing or unfiled public information. All items used in analyzing the odds of distress are taken from the Investor balance sheet as well as cash flow and income statements available from the company's most recent filings. Check out Investing Opportunities.

Search Probability Of Bankruptcy 

 
Refresh
The Probability of Bankruptcy SHOULD NOT be confused with the actual chance of a company to file for chapter 7, 11, 12, or 13 bankruptcy protection. Macroaxis simply defines Financial Distress as an operational condition where a company is having difficulty meeting its current financial obligations towards its creditors or delivering on the expectations of its investors. Macroaxis derives these conditions daily from both public financial statements as well as analysis of stock prices reacting to market conditions or economic downturns, including short-term and long-term historical volatility. Other factors taken into account include analysis of liquidity, revenue patterns, R&D expenses, and commitments, as well as public headlines and social sentiment.

Probability Of Bankruptcy 
 = 
Normalized 
 
Z-Score 

Probability Of Bankruptcy is a relative measure of the likelihood of financial distress. For stocks, the Probability Of Bankruptcy is the normalized value of Z-Score. For funds and ETFs, it is derived from a multi-factor model developed by Macroaxis. The score is used to predict the probability of a firm or a fund experiencing financial distress within the next 24 months. Unlike Z-Score, Probability Of Bankruptcy is the value between 0 and 100, indicating the firm's actual probability it will be financially distressed in the next 2 fiscal years.

Probability Of Bankruptcy In A Nutshell

When looking at the probability of bankruptcy, you want to ensure there is a normalized z-score, which means you do not want the data to be too far from the mean, which is what the z-score measures. When looking at this data point, the probability of bankruptcy is a value between 0 and 100, which will tell you the probability of the company having financial distress in the next 2 years. This is very important to consider because you do not want to invest in a company that is potentially going under.

This data point is certainly a complicated one because you can look at it in either a statistical light or a matter of fact light. When you look at a company that is struggling, you can certainly tell by just how things are and by something simple as cash flow if they are going to succeed. Benjamin Graham, the most well known person of value investing searched for these types of distressed companies, but that is a story for another day. As stated here on Macroaxis, probability of bankruptcy should not be confused with the actual chance of a company to file for bankruptcy protection.

Closer Look at Probability Of Bankruptcy

Taking it a little bit further, besides the obvious reasons of the company being worth nothing, you can use this tool to help you find value stocks. As alluded too, this is when you look for struggling companies, but the idea is that there is limited to no debt and the company has enough cash to survive the down times. Of course there are other factors, but that is why using the probability of bankruptcy in this scenario may prove useful.

This type of information is purely fundamental and should be used as such. When looking at charts, you may see a stocks price begin to tank and take on pressure, this is a prime time to take a look and run the probability of bankruptcy, to know in the near term if the business is going to viable. There are other items you would want to take a look at such as the executive’s comments and the tone of the room. Listen in on the conference calls and determine what everyone is saying, as this will give you the best feel of where the company is headed. Bankruptcy is a last resort due to the many implications it poses, but do know a company can come close to bankruptcy and still prove to be a winner.

All Fundamental Indicators

Be your own money manager

Our tools can tell you how much better you can do entering a position in Investor Education without increasing your portfolio risk or giving up expected return. As an individual investor, you need to find a reliable way to track all your investment portfolios. However, your requirements will often be based on how much of the process you decide to do yourself. In addition to allowing all investors analytical transparency into all their portfolios, our tools can evaluate.risk-adjusted returns of your individual positions relative to your overall portfolio.

Did you try this?

Run Portfolio Backtesting Now

   

Portfolio Backtesting

Avoid under-diversification and over-optimization by backtesting your portfolios
All  Next Launch Module

Becoming a Better Investor with Macroaxis

Macroaxis puts the power of mathematics on your side. We analyze your portfolios and positions such as Investor Education using complex mathematical models and algorithms, but make them easy to understand. There is no real person involved in your portfolio analysis. We perform a number of calculations to compute absolute and relative portfolio volatility, correlation between your assets, value at risk, expected return as well as over 100 different fundamental and technical indicators.

Build Optimal Portfolios

Align your risk with return expectations

Fix your portfolio
By capturing your risk tolerance and investment horizon Macroaxis technology of instant portfolio optimization will compute exactly how much risk is acceptable for your desired return expectations
Check out Investing Opportunities. Note that the Investor Education information on this page should be used as a complementary analysis to other Investor Education statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

Other Tools for Investor Private

When running Investor Education price analysis, check to measure Investor Education market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Investor Education is operating at the current time. Most of Investor Education value examination focuses on studying past and present price action to predict the probability of Investor Education future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Investor Education price. Additionally, you may evaluate how the addition of Investor Education to your portfolios can decrease your overall portfolio volatility.
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Go
Bond Directory
Find actively traded corporate debentures issued by US companies
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go