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.
Metalico has a Altman Z-Score of 0.60, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.
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 Metalico's Altman Z-Score or its related term are showing as below:
FRA:MT5'
s Altman Z-Score Range Over the Past 10 Years
Min: 0.67 Med: 2.6 Max: 5.75
Current: 0.72
During the past 13 years, Metalico's highest Altman Z-Score was 5.75. The lowest was 0.67. And the median was 2.60.
Metalico Altman Z-Score Historical Data
The historical data trend for Metalico'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.
Competitive Comparison of Metalico's Altman Z-Score
For the Metal Fabrication subindustry, Metalico'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.
Metalico's Altman Z-Score Distribution in the Industrial Products Industry
For the Industrial Products industry and Industrials sector, Metalico's Altman Z-Score distribution charts can be found below:
* The bar in red indicates where Metalico's Altman Z-Score falls into.
Metalico 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.
Metalico'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
*
-0.0086
+
1.4
*
-0.6671
+
3.3
*
-0.3051
+
0.6
*
0.5695
+
1.0
*
2.2079
=
0.60
* 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.
Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones
Metalico has a Altman Z-Score of 0.60 indicating it is in Distress Zones.
Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.
Metalico (FRA:MT5) 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.
Altman Z-Score does not apply to financial companies.
Metalico Altman Z-Score Related Terms
Thank you for viewing the detailed overview of Metalico's Altman Z-Score provided by GuruFocus.com. Please click on the following links to see related term pages.
Metalico Inc was originally organized as a Delaware corporation in August 1997. The Company along with its subsidiaries operates in two distinct business segments; scrap metal recycling and lead metal product fabricating. The Companys operating facilities include thirty-one scrap metal recycling facilities, including a combined aluminum de-oxidizing plant and four lead product manufacturing and fabricating plants. In the Scrap Metal Recycling segment, its operations mainly involves the collection and processing of ferrous and non-ferrous metals. It collects industrial and obsolete scrap metal, process it into reusable forms and supply the recycled metals to its consumers that include electric arc furnace mills, integrated steel mills, foundries, secondary smelters, aluminum recyclers and metal brokers. The Company acquires unprocessed scrap metals mainly in its local and regional markets and sells to consumers nationally and in Canada as well as to exporters and international brokers. Some of the metal commodities it recycles include steel, copper, aluminum, stainless steel, molybdenum, tantalum, platinum, lead and many others. In Lead Fabricating segment, through four physical operations located in three states, the Company consumes approximately 40 to 45 million pounds of lead metal per year that are utilized in more than one hundred different base products. Its products are sold nationally into diverse industries such as roofing, plumbing, radiation shielding for pharmaceutical and power generation, electronic solders, ammunition, automotive, Department of Defense contractors, and others. The Company sells its lead fabrications nationally. Products are sold to distributors, wholesalers, the plumbing and building trades, equipment manufacturers and other consumers. Its lead fabrication facilities compete against two fabricators of similar, but limited products based in the Southwest who distribute nationally and several smaller regional producers of similar products. To a lesser extent, it also competes against products imported from South America, Canada, Europe and Asia. The Company is subject to comprehensive and frequently changing Federal, state and local laws and regulations.
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