What is Best Buy 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, Best Buy Co's Probability of Financial Distress (%) is 0.04%.
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 Best Buy Co's Probability of Financial Distress (%)
For the Specialty Retail subindustry, Best Buy 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.
Best Buy Co's Probability of Financial Distress (%) Distribution in the Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, Best Buy Co's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Best Buy Co's Probability of Financial Distress (%) falls into.
Best Buy 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 |
| = | -7.96 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.04% |
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).
Best Buy Co (Best Buy Co) Business Description
Traded in Other Exchanges
Address
7601 Penn Avenue South, Richfield, MN, USA, 55423
With $46.3 billion in consolidated fiscal 2023 sales, Best Buy is the largest pure-play consumer electronics retailer in the U.S., boasting roughly 8.5% share of the U.S. market and north of 35% share of offline sales, per our calculations, CTA, and Euromonitor data. The firm generates the bulk of its sales in-store, with mobile phones and tablets, computers, and appliances representing its three largest categories. Recent investments in e-commerce fulfillment, accelerated by the COVID-19 pandemic, have seen the U.S. e-commerce channel roughly double from prepandemic levels, with management estimating that it will represent a mid-30% proportion of sales moving forward.
Executives
| Richard M Schulze |
10 percent owner |
BEST BUY CO INC, 7075 FLYING CLOUD DRIVE, EDEN PRAIRIE MN 55344 |
| Todd G. Hartman |
officer: GC, Chief Risk/Comp Officer |
7601 PENN AVENUE SOUTH, RICHFIELD MN 55423 |
| David C Kimbell |
director |
8410 W. BRYN MAWR, CHICAGO IL 60631 |
| Kathleen Scarlett |
officer: Chief Human Resources Officer |
7601 PENN AVE S, RICHFIELD MN 55423 |
| Jason J Bonfig |
officer: Chief Merchandising Officer |
7601 PENN AVENUE SOUTH, RICHFIELD MN 55423 |
| Matthew M Bilunas |
officer: Chief Financial Officer |
C/O BEST BUY CO., INC., 7601 PENN AVENUE SOUTH, RICHFIELD MN 55423 |
| Barry Corie S |
officer: CFO |
7601 PENN AVE S., RICHFIELD MN 55423 |
| Mathew Watson |
officer: VP, Finance - Contr. & CAO |
7601 PENN AVENUE SOUTH, RICHFIELD MN 55423 |
| Damien Harmon |
officer: Pres., Omnichannel Ops & Serv |
7601 PENN AVENUE SOUTH, RICHFIELD MN 55423 |
| Sima Sistani |
director |
675 AVENUE OF THE AMERICAS, 6TH FLOOR, NEW YORK NY 10010 |
| Melinda D Whittington |
director |
THREE LAKES DRIVE, NORTHFIELD IL 60093 |
| Deborah Disanzo |
officer: President, Best Buy Health |
7601 PENN AVENUE SOUTH, RICHFIELD MN 55423 |
| Allison Peterson |
officer: Chief Customer Officer |
7601 PENN AVENUE SOUTH, RICHFIELD MN 55423 |
| Brian A Tilzer |
officer: Chief Digital & Tech Officer |
CLARENDON HOUSE, 2 CHURCH STREET, HAMILTON D0 HM11 |
| Mark A Irvin |
officer: Chief Supply Chain Officer |
7601 PENN AVENUE, RICHFIELD MN 55423 |
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