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EMR (Emerson Electric Co) Altman Z-Score : 3.78 (As of Oct. 31, 2024)


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What is Emerson Electric Co 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 3.8 is strong.

Emerson Electric Co has a Altman Z-Score of 3.78, 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 Emerson Electric Co's Altman Z-Score or its related term are showing as below:

EMR' s Altman Z-Score Range Over the Past 10 Years
Min: 2.83   Med: 4.35   Max: 5.99
Current: 3.8

During the past 13 years, Emerson Electric Co's highest Altman Z-Score was 5.99. The lowest was 2.83. And the median was 4.35.


Emerson Electric Co Altman Z-Score Historical Data

The historical data trend for Emerson Electric Co'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.

Emerson Electric Co Altman Z-Score Chart

Emerson Electric Co Annual Data
Trend Sep14 Sep15 Sep16 Sep17 Sep18 Sep19 Sep20 Sep21 Sep22 Sep23
Altman Z-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 5.12 4.41 4.64 3.10 4.20

Emerson Electric Co Quarterly Data
Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 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 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.79 4.20 3.44 3.78 3.82

Competitive Comparison of Emerson Electric Co's Altman Z-Score

For the Specialty Industrial Machinery subindustry, Emerson Electric Co'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.


Emerson Electric Co's Altman Z-Score Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, Emerson Electric Co's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Emerson Electric Co's Altman Z-Score falls into.



Emerson Electric Co 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.

Emerson Electric Co'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*0.0269+1.4*0.8804+3.3*0.0542+0.6*3.2773+1.0*0.3721
=3.78

* 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 $45,585 Mil.
Total Current Assets was $8,820 Mil.
Total Current Liabilities was $7,592 Mil.
Retained Earnings was $40,135 Mil.
Pre-Tax Income was 455 + 652 + 139 + 843 = $2,089 Mil.
Interest Expense was -56 + -90 + -84 + -150 = $-380 Mil.
Revenue was 4380 + 4376 + 4117 + 4090 = $16,963 Mil.
Market Cap (Today) was $61,930 Mil.
Total Liabilities was $18,897 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
=(8820 - 7592)/45585
=0.0269

X2=Retained Earnings/Total Assets
=40135/45585
=0.8804

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(2089 - -380)/45585
=0.0542

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=61930.440/18897
=3.2773

X5=Revenue/Total Assets
=16963/45585
=0.3721

The zones of discrimination were as such:

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

Emerson Electric Co has a Altman Z-Score of 3.78 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.


Emerson Electric Co  (NYSE:EMR) 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.


Emerson Electric Co Altman Z-Score Related Terms

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Emerson Electric Co Business Description

Address
8000 West Florissant Avenue, P.O. Box 4100, St. Louis, MO, USA, 63136
Emerson Electric sells automation equipment and services under two segments: intelligent devices and software control. Within software and control, it also holds a majority interest in AspenTech, an industrial software business, and owns a test and measurement business that was formerly National Instruments. Intelligent devices also holds Emerson's tools business, which boasts several household brands, like Ridgid. Emerson's automation business is most known for its process manufacturing solutions, which consists of measurement and analytical instrumentation, as well as control valves and actuators, among other products and services. Nearly half of the firm's geographic sales come from the Americas.
Executives
Matthew S Levatich director HARLEY-DAVIDSON MOTOR COMPANY, 3700 WEST JUNEAU AVENUE, MILWAUKEE WI 53208
Surendralal Lanca Karsanbhai officer: Exec Pres Auto Sols C/O EMERSON ELECTRIC CO., 8000 W. FLORISSANT AVENUE, ST. LOUIS MO 63136
Mark A Blinn director 5215 N. O'CONNOR BLVD., SUITE 2300, IRVING TX 75039
Ram R. Krishnan officer: Executive Vice Pres & COO C/O EMERSON ELECTRIC CO., 8000 W. FLORISSANT AVENUE, ST. LOUIS MO 63136
Mckelvey James Morgan Jr. director 2645 SOUTH BAYSHORE #802, MIAMI FL 33133
Joshua B. Bolten director ROCK CREEK GLOBAL ADVISORS, 1401 I STREET NW, SUITE 1120, WASHINGTON DC 20005
Arthur F Golden director 450 LEXINGTON AVE, NEW YORK NY 10017
Easter William H Iii director 370 17TH ST, STE 2500, DENVER CO 80202
Vidya Ramnath officer: Senior VP & CMO C/O EMERSON ELECTRIC CO., 8000 W. FLORISSANT AVENUE, ST. LOUIS MO 63136
Nicholas J. Piazza officer: Senior VP & CPO C/O EMERSON ELECTRIC CO., 8000 W. FLORISSANT AVENUE, ST. LOUIS MO 63136
Lisa Flavin officer: Sr. VP & CCO 8300 MARYLAND AVENUE, ST. LOUIS MO 63105
Leticia Goncalves Lourenco director C/O EMERSON ELECTRIC CO., 8000 W. FLORISSANT AVENUE, ST. LOUIS MO 63136
Peter Zornio officer: Chief Technology Officer C/O EMERSON ELECTRIC CO., 8000 W. FLORISSANT AVENUE, ST. LOUIS MO 63136
Frank J Dellaquila officer: Sr. V. P. and Controller C/O RELIANCE STEEL & ALUMINUM CO., 16100 N. 71ST STREET, SUITE 400, SCOTTSDALE AZ 85254
Sara Yang Bosco officer: Sr. VP, Secy & Gen. Counsel 8000 W. FLORISSANT AVENUE, ST. LOUIS MO 63136