What is American Express Co 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, American Express Co'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 American Express Co's Probability of Financial Distress (%)
For the Credit Services subindustry, American Express Co'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.
American Express Co's Probability of Financial Distress (%) Distribution in the Credit Services Industry
For the Credit Services industry and Financial Services sector, American Express Co's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where American Express Co's Probability of Financial Distress (%) falls into.
American Express Co 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 |
| = | -8.25 |
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 banks, 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).
American Express Co (American Express Co) Business Description
Traded in Other Exchanges
Address
200 Vesey Street, New York, NY, USA, 10285
American Express is a global financial institution, operating in about 130 countries, that provides consumers and businesses charge and credit card payment products. The company also operates a highly profitable merchant payment network. Since 2018, it has operated in three segments: global consumer services, global commercial services, and global merchant and network services. In addition to payment products, the company's commercial business offers expense management tools, consulting services, and business loans.
Executives
| Jeffrey C Campbell |
officer: EVP, Chief Financial Officer |
4333 AMON CARTER BLVD, FORT WORTH TX 76155 |
| Douglas E. Buckminster |
officer: Pres, Int'l Consumer & SBS |
200 VESEY STREET, M/S 01-50-01, NEW YORK NY 10285 |
| Clayton Walter Joseph Iii |
director |
C/O APOLLO GLOBAL MANAGEMENT, INC., 9 WEST 57TH STREET, 43RD FLOOR, NEW YORK NY 10019 |
| Caillec Christophe Le |
officer: Chief Financial Officer |
200 VESEY STREET, NEW YORK NY 10285 |
| Monique Herena |
officer: Chief Human Resources Officer |
225 LIBERTY STREET, NEW YORK NY 10286 |
| Howard Grosfield |
officer: President, U.S. Consumer Serv |
200 VESEY STREET, NEW YORK NY 10285 |
| Quinn Jessica Lieberman |
officer: Controller |
200 VESEY STREET, NEW YORK NY 10285 |
| Raymond Joabar |
officer: CRO and Pres., GRBC |
200 VESEY STREET, NEW YORK NY 10285 |
| Denise Pickett |
officer: CRO and President, GRBC Group |
200 VESEY STREET, NEW YORK NY 10285 |
| Anna Marrs |
officer: Pres., Global Comm. Services |
200 VESEY STREET, NEW YORK NY 10285 |
| Deborah P Majoras |
director |
ONE PROCTER & GAMBLE PLAZA, CINCINNATI OH 45202 |
| Rafael Marquez |
officer: President, International Card |
200 VESEY STREET, NEW YORK NY 10285 |
| Theodore Leonsis |
director |
WASHINGTON CAPITALS, 627 N GLEBE RD SUITE 850, ARLINGTON VA 22203 |
| Stephen J Squeri |
officer: EVP, Chief Information Officer |
200 VESEY STREET, NEW YORK NY 10285 |
| Anre D Williams |
officer: Pres. Global Merchant Services |
200 VESEY STREET, NEW YORK NY 10285 |
American Express Co (American Express Co) Headlines
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