LL Flooring Holdings (LL Flooring Holdings) Probability of Financial Distress (%) : 1.16% (As of Apr. 30, 2024)

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What is LL Flooring Holdings 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, LL Flooring Holdings's Probability of Financial Distress (%) is 1.16%.

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 LL Flooring Holdings's Probability of Financial Distress (%)

For the Home Improvement Retail subindustry, LL Flooring Holdings'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.

LL Flooring Holdings's Probability of Financial Distress (%) Distribution in the Retail - Cyclical Industry

For the Retail - Cyclical industry and Consumer Cyclical sector, LL Flooring Holdings's Probability of Financial Distress (%) distribution charts can be found below:

* The bar in red indicates where LL Flooring Holdings's Probability of Financial Distress (%) falls into.

LL Flooring Holdings 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

-4.45

The Probability of Financial Distress (%) (PFD) was then obtianed by:

PFD	=	1	/	(1 + e^(-LPFD))	*	100%
	=	1.16%

The eight explanatory variables are:

1. NIMTAAVG = Net Income to Market Total Assets

NIMTAAVG	=	Net Income	/	Market Total Assets
	=	Net Income	/	(Market Cap + Total Liabilities)

*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

TLMTA

Total Liabilities

Market Total Assets

3. CASHMTA = Cash to Market Total Assets

For non-financial companies, CASHMTA is measured as:

CASHMTA

Cash, Cash Equivalents, Marketable Securities

Market Total Assets

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

MB	=	Market Cap	/	Adjusted Book Equity
	=	Market Cap	/	(Total Stockholders Equity + 0.1 * ( Market Cap - Total Stockholders Equity))

8. PRICE

PRICE is measured as the log of the stock price, capped at log(15).

LL Flooring Holdings (NYSE:LL) Probability of Financial Distress (%) Explanation

Like the Altman Z-Score, the PFD measures a company's bankruptcy risk in the upcoming year. 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.

LL Flooring Holdings Probability of Financial Distress (%) Related Terms

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LL Flooring Holdings (LL Flooring Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » LL Flooring Holdings Inc (NYSE:LL) » Definitions » Probability of Financial Distress (%)

Comparable Companies

Traded in Other Exchanges

N/A

Address

4901 Bakers Mill Lane, Richmond, VA, USA, 23230

Website

https://www.llflooring.com

LL Flooring Holdings Inc is a specialty retailer of hardwood flooring in North America. The firm primarily operates across the U.S. and Ontario, Canada, through its retail store operations segment. Its products include foreign and domestic hardwood species, engineered hardwood, laminate, resilient-vinyl, bamboo, and cork flooring. The company derives most of its revenue from laminate, vinyl, engineered vinyl plank, and porcelain tile, followed by Solid and Engineered Hardwood. The firm also offers a selection of flooring enhancements and accessories, including moldings, noise-reducing underlay, adhesives, and flooring tools. It primarily targets do-it-yourself (DIY), do-it-for-me (DIFM), and commercial customers. Bellawood is a core brand of the company.

Executives

Robert L Madore	officer: EVP and CFO	C/O RALPH LAUREN CORPORATION, 650 MADISON AVENUE, NEW YORK NY 10022
F Terrence Blanchard	officer: Interim CFO	C/O LAWSON PRODUCTS, INC., 1666 EAST TOUHY AVENUE, DES PLAINES IL 60018
Kristian B Lesher	officer: SVP and CTO	4901 BAKERS MILL LANE, RICHMOND VA 23230
Chasity D Grosh	other: Chief Accounting Officer	4901 BAKERS MILL LANE, RICHMOND VA 23230
Michael E Dauberman	officer: EVP, CGO	4901 BAKERS MILL LANE, RICHMOND VA 23230
Clark Douglas S Jr	officer: SVP Merch & Supply Chain	4901 BAKERS MILL LANE, RICHMOND VA 23230
Douglas T Moore	director	9950 MAYLAND DR, RICHMOND VA 23233
Joseph M Nowicki	director	C/O BEACON ROOFING SUPPLY, INC., 505 HUNTMAR PARK DRIVE SUITE 300, HERNDON VA 20170
Charles E Tyson	director, officer: President & CEO	LL FLOORING HOLDINGS, INC., 4901 BAKERS MILL LANE, RICHMOND VA 23230
Ashish Parmar	director	4901 BAKERS MILL LANE, RICHMOND VA 23230
Nancy M Taylor	director	TREDEGAR CORP, 1100 BOULDERS PARKWAY, RICHMOND VA 23219
Famous P Rhodes	director	4960 CONFERENCE WAY NORTH, SUITE 100, BOCA RATON FL 33431
Jimmie L Wade	director	C/O ADVANCE AUTO PARTS, 5673 AIRPORT RD, ROANOKE VA 24012
Matt T Argano	officer: Chief Human Resources Officer	LL FLOORING HOLDINGS, INC., 4901 BAKERS MILL LANE, RICHMOND VA 23230
Terri F Graham	director	C/O JACK IN THE BOX INC, 9330 BALVOA AVE, SAN DIEGO CA 92123