What is EMC 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, EMC'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 EMC's Probability of Financial Distress (%)
For the Computer Hardware subindustry, EMC'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.
EMC's Probability of Financial Distress (%) Distribution in the Hardware Industry
For the Hardware industry and Technology sector, EMC's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where EMC's Probability of Financial Distress (%) falls into.
EMC 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 |
| = | 0.00 |
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).
EMC (EMC) Business Description
Traded in Other Exchanges
N/A
Address
EMC Corp is a Massachusetts corporation, incorporated in 1979. The Company together with its subsidiaries supports the businesses and service providers to transform information technology (IT) operations to an as a service model (ITaaS). The Company operates in three segments: EMC Information Infrastructure, Pivotal and VMware Virtual Infrastructure. The Company's information infrastructure provides a foundation for organizations to store, manage, protect, analyze and secure ever-increasing quantities of information, while at the same time improving business agility, lowering cost and increasing competitive advantage. VMware Virtual Infrastructure provides virtualization infrastructure solutions. Pivotal provides application and data infrastructure software, agile development services and data science consulting. The Company offers a comprehensive portfolio of enterprise storage systems and software - including high-end EMC VMAX and mid-tier EMC VNX unified storage and a portfolio of backup products that support enterprise application workloads. The Company's two additional storage families, EMC Isilon and EMC Atmos, are specifically designed to handle vast quantities of unstructured data. EMC supports a broad range of customers, including service providers, around the world - in every industry, in both public and private sectors, and of sizes ranging from the Fortune 500 to small business and individual consumers. The Company markets its products through direct sales and through multiple distribution channels. It has a direct sales presence throughout North America, Latin America, Europe, the Middle East, South Africa and the Asia Pacific region. The Company also has agreements in place with many partners, including value-added resellers and distributors, cloud service providers, systems integrators, outsourcers, Independent Software Vendors ("ISVs"), and Original Equipment Manufacturers ("OEMs"). The Company competes with many companies in the markets it serve, including companies that offer IT products and services and others that offer specific information storage, protection, security, management and intelligence, data analytics or virtualization products or services.
Executives
| Laura Sen |
director |
ONE MERCER ROAD, P.O. BOX 9601, NATICK MA 01760-9601 |
| John R Egan |
director |
176 SOUTH ST., HOPKINTON MA 01748 |
| Donald J Carty |
director |
C/O DELL INC., ONE DELL WAY, ROUND ROCK TX 78682-2244 |
| Judith A Miscik |
director |
300 RENAISSANCE CENTER, M/C: 482-C24-A68, DETROIT MI 48265 |
| William D Green |
director |
C/O ACCENTURE, 161 N CLARK STREET, CHICAGO IL 60601 |
| William F Scannell |
officer: President,Global Sales/Cust Op |
EMC CORPORATION, 176 SOUTH STREET, HOPKINTON MA 01748 |
| Randolph L Cowen |
director |
176 SOUTH STREET HOPKINTON MA 01748 |
| Howard D Elias |
officer: President & COO, Glob Ent Srvs |
C/O EMC CORPORATION, 176 SOUTH STREET, HOPKINTON MA 01748 |
| Paul T Dacier |
officer: EVP & General Counsel |
EMC CORPORATION, 176 SOUTH STREET, HOPKINTON MA 01748 |
| Erin Mcsweeney |
officer: EVP, Human Resources |
EMC CORPORATION, 176 SOUTH STREET, HOPKINTON MA 01748 |
| Teuber William J Jr |
officer: Vice Chairman |
EMC CORPORATION, 176 SOUTH STREET, HOPKINTON MA 01748 |
| James S Distasio |
director |
C/O EVERSOURCE ENERGY, 300 CADWELL DRIVE, BOSTON MA 01104 |
| Paul Sagan |
director |
AKAMAI TECHNOLOGIES INC, 8 CAMBRIDGE CENTER, CAMBRIDGE MA 02142 |
| Jeremy Burton |
officer: President, Prod & Marketing |
C/O SNOWFLAKE INC., 106 EAST BABCOCK STREET SUITE 3A, BOZEMAN MT 59715 |
| David I Goulden |
officer: CEO, EMCII |
176 SOUTH STREET, HOPKINTON MA 01748 |
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