Sunday, April 23, 2017 2:59:46 PM
Intuition would suggest that market cap would not be particularly relevant. But The work of Edward Altman shows that one of the five factors in his linear discriminant model does consider the market value of equity ( numerator in X4)
There is a body of research on predicting corporate failure
he original Z-score formula was as follows:[1]
Z = 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + 1.0X5.
X1 = working capital / total assets. Measures liquid assets in relation to the size of the company.
X2 = retained earnings / total assets. Measures profitability that reflects the company's age and earning power.
X3 = earnings before interest and taxes / total assets. Measures operating efficiency apart from tax and leveraging factors. It recognizes operating earnings as being important to long-term viability.
X4 = market value of equity / book value of total liabilities. Adds market dimension that can show up security price fluctuation as a possible red flag.
X5 = sales / total assets. Standard measure for total asset turnover (varies greatly from industry to industry).
Altman found that the ratio profile for the bankrupt group fell at -0.25 avg, and for the non-bankrupt group at +4.48 avg.
Trendliner
Recent BHC News
- Form 4/A - Statement of changes in beneficial ownership of securities: [Amend] • Edgar (US Regulatory) • 05/21/2024 09:51:47 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/21/2024 08:09:40 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/21/2024 08:08:33 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/20/2024 10:04:11 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/20/2024 10:01:52 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/20/2024 09:59:26 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/20/2024 09:49:22 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/20/2024 09:46:14 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/20/2024 09:43:44 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/15/2024 12:07:09 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/04/2024 09:24:55 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/04/2024 09:19:13 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/04/2024 09:16:00 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 03/04/2024 03:36:17 PM
- Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405] • Edgar (US Regulatory) • 02/22/2024 10:04:26 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/22/2024 12:04:41 PM
- Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend] • Edgar (US Regulatory) • 02/13/2024 09:30:26 PM
- Form SC 13D/A - General statement of acquisition of beneficial ownership: [Amend] • Edgar (US Regulatory) • 02/08/2024 02:00:18 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/01/2024 10:18:42 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 01/02/2024 09:19:47 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 01/02/2024 09:18:36 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 01/02/2024 09:16:46 PM
Avant Technologies Engages Wired4Tech to Evaluate the Performance of Next Generation AI Server Technology • AVAI • May 23, 2024 8:00 AM
Branded Legacy, Inc. Unveils Collaboration with Celebrity Tattoo Artist Kat Tat for New Tattoo Aftercare Product • BLEG • May 22, 2024 8:30 AM
"Defo's Morning Briefing" Set to Debut for "GreenliteTV" • GRNL • May 21, 2024 2:28 PM
North Bay Resources Announces 50/50 JV at Fran Gold Project, British Columbia; Initiates NI 43-101 Resources Estimate and Bulk Sample • NBRI • May 21, 2024 9:07 AM
Greenlite Ventures Inks Deal to Acquire No Limit Technology • GRNL • May 17, 2024 3:00 PM
Music Licensing, Inc. (OTC: SONG) Subsidiary Pro Music Rights Secures Final Judgment of $114,081.30 USD, Demonstrating Strength of Licensing Agreements • SONGD • May 17, 2024 11:00 AM