What is Sonic 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, Sonic'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 Sonic's Probability of Financial Distress (%)
For the Restaurants subindustry, Sonic'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.
Sonic's Probability of Financial Distress (%) Distribution in the Restaurants Industry
For the Restaurants industry and Consumer Cyclical sector, Sonic's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Sonic's Probability of Financial Distress (%) falls into.
Sonic 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).
Sonic (SONC) Business Description
Traded in Other Exchanges
N/A
Address
Sonic Corp operates and franchises drive-in restaurants throughout the United States. The restaurants typically consist of a building that houses only a kitchen to go along with 16 to 24 parking spaces that have their own payment terminals, intercom speakers, and menu boards. Carhops serve customers in their cars. Many locations also have a drive-thru lane and patio seating as alternatives. Sonic franchises roughly 90% of its restaurants, and the royalty revenue the company earns on franchise sales contributes roughly a quarter of total company revenue. Company-operated stores provide the balance of total revenue. Sonic owns the property on which hundreds of its restaurants are located. For those properties that house franchised stores, franchisees lease from the company.
Executives
| Steven A Davis |
director |
3776 SOUTH HIGH ST, COLUMBUS OH 43207 |
| Lauren R Hobart |
director |
345 COURT STREET, CORAOPOLIS PA 15275 |
| Tony Bartel |
director |
625 WESTPORT PARKWAY, GRAPEVINE TX 76051 |
| Kathy L Taylor |
director |
C/O FREDERIC DORWART LAWYERS, 124 EAST FOURTH STREET, TULSA OK 74103 |
| Pedro Claudia San |
officer: President |
300 JOHNNY BENCH DRIVE, OKLAHOMA CITY OK 73104 |
| Kate S Lavelle |
director |
24089 3RD STREET, FAIRHOPE AL 36532 |
| Federico F Pena |
director |
711 HIGH STREET, DES MOINES IA 50392-0300 |
| J Larry Nichols |
director |
DEVON ENERGY CORP, 20 NORTH BROADWAY STE 1500, OKLAHOMA CITY OK 73102-8260 |
| Southeastern Asset Management Inc/tn/ |
10 percent owner |
6410 POPLAR AVENUE, SUITE 900, MEMPHIS TN 38119 |
| Longleaf Partners Funds Trust |
10 percent owner |
C/O SOUTHEASTERN ASSET MANAGEMENT, 6410 POPLAR AVE, SUITE 900, MEMPHIS TN 38119 |
| Todd Whitney Smith |
officer: President and CMO |
300 JOHNNY BENCH DRIVE, OKLAHOMA CITY OK 73104 |
| Craig Jeffrey Miller |
officer: Former Officer of Subsidiary |
5008 HARTRIDGE WAY, GREENSBORO NC 27407 |
| Robert M Rosenberg |
director |
|
| Michael J Maples |
director |
2208 WINDSOR ROAD, AUSTIN TX 78703 |
| Douglas N Benham |
director |
|
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