What is Simon Property Group 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, Simon Property Group'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 Simon Property Group's Probability of Financial Distress (%)
For the REIT - Retail subindustry, Simon Property Group'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.
Simon Property Group's Probability of Financial Distress (%) Distribution in the REITs Industry
For the REITs industry and Real Estate sector, Simon Property Group's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Simon Property Group's Probability of Financial Distress (%) falls into.
Simon Property Group 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 |
| = | -7.91 |
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).
Simon Property Group (Simon Property Group) Business Description
Traded in Other Exchanges
Address
225 West Washington Street, Indianapolis, IN, USA, 46204
Simon Property Group is the second-largest real estate investment trust in the United States. Its portfolio includes an interest in 231 properties: 136 traditional malls, 70 premium outlets, 14 Mills centers (a combination of a traditional mall, outlet center, and big-box retailers), 6 lifestyle centers, and 5 other retail properties. Simon's portfolio averaged $693 in sales per square foot over the 12 months prior to the pandemic. The company also owns a 21% interest in Klepierre, a European retail company with investments in shopping centers in 16 countries, and joint venture interests in 33 premium outlets across 11 countries.
Executives
| Larry C Glasscock |
director |
SYSCO CORPORATION, 1390 ENCLAVE PARKWAY, HOUSTON TX 77077 |
| Randall J Lewis |
director |
WELLPOINT, INC, 120 MONUMENT CIRCLE, INDIANAPOLIS IN 46204 |
| Allan B Hubbard |
director |
ANTHEM INC., 120 MONUMENT CIRCLE, INDIANAPOLIS IN 46204 |
| Glyn Aeppel |
director |
6 WHIPPOORWILL LANE, WESTPORT CT 06880 |
| Gary M Rodkin |
director |
700 ANDERSON HILL RD, PURCHASE NJ 10577 |
| Reuben S Leibowitz |
director |
466 LEXINGTON AVENUE 10TH FL, NEW YORK NY 10017 |
| Marta R Stewart |
director |
C/O NORFOLK SOUTHERN CORP, THREE COMMERCIAL PL, NORFOLK VA 23510-9219 |
| Daniel C. Smith |
director |
3000 GODFREY GRADUATE AND EXECUTIVE CTR., 1275 EAST TENTH STREET, BLOOMINGTON IN 47405-1703 |
| Stefan M Selig |
director |
2 EAST 70TH STREET, NEW YORK NY 10021 |
| Peggy Fang Roe |
director |
100 COMMERCE LANE, APT. 1401, BETHESDA MD 20814 |
| Karen N Horn |
director |
|
| Smith J Albert Jr |
director |
111 MONUMENT CIRCLE, IN1-0175, INDIANAPOLIS IN 46204 |
| Matthew A Jackson |
officer: SVP, Assistant Treasurer |
225 W. WASHINGTON ST., INDIANAPOLIS IN 46256 |
| Kevin M Kelly |
officer: Asst. General Counsel/Sec. |
225 W. WASHINGTON ST., INDIANAPOLIS IN 46204 |
| Donald G Frey |
officer: EVP, Treasurer |
225 W. WASHINGTON ST., INDIANAPOLIS IN 46204 |
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