What is Cardinal Health 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, Cardinal Health's Probability of Financial Distress (%) is 0.00%.
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 Cardinal Health's Probability of Financial Distress (%)
For the Medical Distribution subindustry, Cardinal Health'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.
Cardinal Health's Probability of Financial Distress (%) Distribution in the Medical Distribution Industry
For the Medical Distribution industry and Healthcare sector, Cardinal Health's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Cardinal Health's Probability of Financial Distress (%) falls into.
Cardinal Health 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 |
| = | -10.71 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.00% |
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).
Cardinal Health (Cardinal Health) Business Description
Traded in Other Exchanges
Address
7000 Cardinal Place, Dublin, OH, USA, 43017
Cardinal Health is one of three leading pharmaceutical wholesalers in the U.S., engaged in sourcing and distributing of branded, generic, and specialty pharmaceutical products to pharmacies (retail chains, independent, and mail order), hospitals networks, and healthcare providers. Along with Cencora and McKesson, the three comprise well over 90% of the U.S. pharmaceutical wholesale industry. Cardinal Health also supplies medical-surgical products and equipment to healthcare facilities in North America, Europe, and Asia.
Executives
| Deborah Weitzman |
officer: CEO, Pharmaceutical Segment |
600 WEST 22ND STREET, SUITE 300, OAK BROOK IL 60523 |
| Mary C. Scherer |
officer: Chief Accounting Officer |
6026 LUDWIG STREET, POWELL OH 43065 |
| Ola M Snow |
officer: Chief Human Resources Officer |
7000 CARDINAL PLACE, DUBLIN OH 43017 |
| Stephen M Mason |
officer: CEO, Medical Segment |
7000 CARDINAL PLACE, DUBLIN OH 43017 |
| Jessica L Mayer |
officer: Chief Legal/Compliance Officer |
7000 CARDINAL PLACE, DUBLIN OH 43017 |
| Michelle D. Greene |
officer: Chief Information Officer |
1141 N. OLD WORLD 3RD STREET, UNIT # 2414, MILWAUKEE WI 53203 |
| Aaron E Alt |
officer: Chief Financial Officer |
3001 COLORADO BLVD., DENTON TX 76210 |
| Michelle Brennan |
director |
1855 S. GRANT STREET, SAN MATEO CA 94402 |
| Sujatha Chandrasekaran |
director |
77 HOT METAL STREET, PITTSBURGH PA 15203 |
| Christine Mundkur |
director |
|
| Steven Barg |
director |
ELLIOTT MANAGEMENT CORPORATION, 40 WEST 57TH STREET, NEW YORK NY 10019 |
| Patricia M English |
officer: Chief Accounting Officer |
7000 CARDINAL PLACE, DUBLIN OH 43017 |
| Sheri H. Edison |
director |
1069 STATE ROUTE 46 EAST, BATESVILLE IN 47006 |
| Jason M. Hollar |
officer: Chief Financial Officer |
3333 BEVERLY ROAD, HOFFMAN ESTATES IL 60179 |
| John H Weiland |
director |
C/O C.R BARD INC, 730 CENTRAL AVE, MURRAY HILL NJ 07974 |
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