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BAM (Brookfield Asset Management) Altman Z-Score : 14.73 (As of Oct. 31, 2024)


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What is Brookfield Asset Management Altman Z-Score?

The Altman Z-Score is a model designed to predict the likelihood of a company going bankrupt within the next two years. Created by American finance professor Edward Altman in 1968, the model is specifically designed for publicly traded manufacturing companies with assets greater than $1 million.

Good Sign:

Altman Z-score of 15.16 is strong.

Brookfield Asset Management has a Altman Z-Score of 14.73, indicating it is in Safe Zones. This implies the Altman Z-Score is strong.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The historical rank and industry rank for Brookfield Asset Management's Altman Z-Score or its related term are showing as below:

BAM' s Altman Z-Score Range Over the Past 10 Years
Min: 7.07   Med: 9.23   Max: 15.16
Current: 15.16

During the past 4 years, Brookfield Asset Management's highest Altman Z-Score was 15.16. The lowest was 7.07. And the median was 9.23.


Brookfield Asset Management Altman Z-Score Historical Data

The historical data trend for Brookfield Asset Management's Altman Z-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Brookfield Asset Management Altman Z-Score Chart

Brookfield Asset Management Annual Data
Trend Dec20 Dec21 Dec22 Dec23
Altman Z-Score
- - 11.20 8.78

Brookfield Asset Management Quarterly Data
Dec20 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24
Altman Z-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 8.50 7.07 8.78 10.54 10.65

Competitive Comparison of Brookfield Asset Management's Altman Z-Score

For the Asset Management subindustry, Brookfield Asset Management's Altman Z-Score, along with its competitors' market caps and Altman Z-Score 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.


Brookfield Asset Management's Altman Z-Score Distribution in the Asset Management Industry

For the Asset Management industry and Financial Services sector, Brookfield Asset Management's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Brookfield Asset Management's Altman Z-Score falls into.



Brookfield Asset Management Altman Z-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

Brookfield Asset Management's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*-0.0349+1.4*-0.0284+3.3*0.1075+0.6*24.0008+1.0*0.0588
=14.73

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Jun. 2024:
Total Assets was $4,185.0 Mil.
Total Current Assets was $779.0 Mil.
Total Current Liabilities was $925.0 Mil.
Retained Earnings was $-119.0 Mil.
Pre-Tax Income was 124 + 102 + 95 + 122 = $443.0 Mil.
Interest Expense was -8 + 0 + 8 + -7 = $-7.0 Mil.
Revenue was 48 + 0 + 160 + 38 = $246.0 Mil.
Market Cap (Today) was $22,200.7 Mil.
Total Liabilities was $925.0 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(779 - 925)/4185
=-0.0349

X2=Retained Earnings/Total Assets
=-119/4185
=-0.0284

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(443 - -7)/4185
=0.1075

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=22200.704/925
=24.0008

X5=Revenue/Total Assets
=246/4185
=0.0588

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

Brookfield Asset Management has a Altman Z-Score of 14.73 indicating it is in Safe Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


Brookfield Asset Management  (NYSE:BAM) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


Brookfield Asset Management Altman Z-Score Related Terms

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Brookfield Asset Management Business Description

Traded in Other Exchanges
Address
181 Bay Street, Suite 100, Brookfield Place, Toronto, ON, CAN, M5H 2T3
Brookfield Asset Management Ltd engages in providing alternative asset management services through an ownership interest in a alternative asset management business. It offers a range of alternative investment products to investors around the world including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies, and private wealth investors.