What is Avery Dennison Probability of Financial Distress (%)?
Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, Avery Dennison's Probability of Financial Distress (%) is 0.03%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
Competitive Comparison of Avery Dennison's Probability of Financial Distress (%)
For the Packaging & Containers subindustry, Avery Dennison's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) 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.
Avery Dennison's Probability of Financial Distress (%) Distribution in the Packaging & Containers Industry
For the Packaging & Containers industry and Consumer Cyclical sector, Avery Dennison's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Avery Dennison's Probability of Financial Distress (%) falls into.
Avery Dennison Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
| LPFD | = | -20.12 * NIMTAAVG | + | 1.60 * TLMTA | - | 7.88 * EXRETAVG | + | 1.55 * SIGMA | - | 0.005 * RSIZE | - | 2.27 * CASHMTA | + | 0.070 * MB | - | 0.09 * PRICE | - | 8.87 |
| = | -8.28 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.03% |
The eight explanatory variables are:
1. NIMTAAVG = Net Income to Market Total Assets
*Note that for companies reported quarterly, geometrically declining weighted quarterly Net Income data in latest four quarters are used.
2. TLMTA = Total liabilities to Market Total Assets
3. CASHMTA = Cash to Market Total Assets
For non-financial companies, CASHMTA is measured as:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
6. RSIZE = Relative Size
| RSIZE | = | log (Market Cap | / | Total Market Cap of S&P 500 companies) |
7. MB = Market to Adjusted Book Equity Ratio
8. PRICE
PRICE is measured as the log of the stock price, capped at log(15).
Avery Dennison (Avery Dennison) Business Description
Traded in Other Exchanges
Address
8080 Norton Parkway, Mentor, OH, USA, 44060
Avery Dennison manufactures pressure-sensitive materials, merchandise tags, and labels. The company also runs a specialty converting business that produces radio-frequency identification, or RFID, inlays and labels. Avery Dennison draws a significant amount of revenue from outside the United States, with international operations accounting for the majority of total sales.
Executives
| Ignacio J Walker |
officer: VP and Chief Legal Officer |
207 GOODE AVE, GLENDALE CA 91203 |
| Divina Fe Santiago |
officer: VP Controller |
8080 NORTON PARKWAY, MENTOR OH 44060 |
| Julia A Stewart |
director |
4551 WEST 107TH STREET STE 100, C/O APPLEBEES INTERNATIONAL INC, OVERLAND PARK KS 66207 |
| Francisco Melo |
officer: President, Solutions Group |
8080 NORTON PARKWAY, MENTOR OH 44060 |
| Hassan Rmaile |
officer: President, Materials Group |
1200 WILLOW LAKE BLVD, P.O. BOX 64683, ST. PAUL MN 55110 |
| Andres Alberto Lopez |
director |
ONE MICHAEL OWENS WAY, PERRYSBURG OH 43551 |
| Francesca Reverberi |
director |
C/O TRINSEO S.A., 1000 CHESTERBROOK BLVD., SUITE 300, BERWYN PA 19312 |
| Anthony Anderson |
director |
1100 N. WOOD DALE ROAD, WOOD DALE IL 60191 |
| Martha N. Sullivan |
director |
529 PLEASANT STREET, MS B-7, ATTLEBORO MA 02703 |
| William Raymond Wagner |
director |
C/O VOCUS, INC., 4296 FORBES BOULEVARD, LANHAM MD 20706 |
| Bradley A Alford |
director |
150 N ORANGE GROVE BLVD, PASADENA CA 91103 |
| Deena Baker-nel |
officer: VP & Chief HR Officer |
207 GOODE AVE, GLENDALE CA 91203 |
| Gregory Lovins |
officer: V.P. and Interim CFO |
207 GOODE AVENUE, GLENDALE CA 91203 |
| Ken C Hicks |
director |
150 N. ORANGE GROVE BLVD, PASADENA CA 91103 |
| Nicholas Colisto |
officer: VP & Chief Information Officer |
C/O AVERY DENNISON CORPORATION, 207 GOODE AVE, GLENDALE CA 91203 |
Avery Dennison (Avery Dennison) Headlines
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