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HON (Honeywell International) Altman Z-Score : 3.43 (As of Oct. 31, 2024)


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What is Honeywell International 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 3.42 is strong.

Honeywell International has a Altman Z-Score of 3.43, 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 Honeywell International's Altman Z-Score or its related term are showing as below:

HON' s Altman Z-Score Range Over the Past 10 Years
Min: 3.33   Med: 3.73   Max: 4.03
Current: 3.42

During the past 13 years, Honeywell International's highest Altman Z-Score was 4.03. The lowest was 3.33. And the median was 3.73.


Honeywell International Altman Z-Score Historical Data

The historical data trend for Honeywell International'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.

Honeywell International Altman Z-Score Chart

Honeywell International Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Altman Z-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 3.99 3.76 3.86 3.95 4.03

Honeywell International Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
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 3.88 4.03 3.86 3.61 3.43

Competitive Comparison of Honeywell International's Altman Z-Score

For the Conglomerates subindustry, Honeywell International'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.


Honeywell International's Altman Z-Score Distribution in the Conglomerates Industry

For the Conglomerates industry and Industrials sector, Honeywell International's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Honeywell International's Altman Z-Score falls into.



Honeywell International 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.

Honeywell International'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*0.1174+1.4*0.6843+3.3*0.1108+0.6*2.4093+1.0*0.515
=3.43

* 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 Sep. 2024:
Total Assets was $73,492 Mil.
Total Current Assets was $28,164 Mil.
Total Current Liabilities was $19,534 Mil.
Retained Earnings was $50,287 Mil.
Pre-Tax Income was 1824 + 1974 + 1871 + 1506 = $7,175 Mil.
Interest Expense was -297 + -250 + -220 + -202 = $-969 Mil.
Revenue was 9728 + 9577 + 9105 + 9440 = $37,850 Mil.
Market Cap (Today) was $133,743 Mil.
Total Liabilities was $55,511 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
=(28164 - 19534)/73492
=0.1174

X2=Retained Earnings/Total Assets
=50287/73492
=0.6843

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(7175 - -969)/73492
=0.1108

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=133742.883/55511
=2.4093

X5=Revenue/Total Assets
=37850/73492
=0.515

The zones of discrimination were as such:

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

Honeywell International has a Altman Z-Score of 3.43 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.


Honeywell International  (NAS:HON) 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.


Honeywell International Altman Z-Score Related Terms

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Honeywell International Business Description

Address
855 South Mint Street, Charlotte, NC, USA, 28202
Honeywell traces its roots to 1885 with Albert Butz's firm, Butz Thermo-Electric Regulator, which produced a predecessor to the modern thermostat. Other inventions by Honeywell include biodegradable detergent and autopilot. Today, Honeywell is a global multi-industry behemoth with one of the largest installed bases of equipment. It operates through four business segments: aerospace technologies (37% of 2023 company revenue), industrial automation (29%), energy and sustainability solutions (17%), and building automation (17%). Recently, Honeywell has made several portfolio changes to focus on fewer end markets and align with a set of secular growth trends. The firm is working diligently to expand its installed base, deriving 30% of its revenue from recurring aftermarket services.
Executives
Darius Adamczyk officer: President and CEO, PMT 855 S. MINT STREET, CHARLOTTE NC 28202
James E Currier officer: President & CEO, Aerospace 855 S. MINT STREET, CHARLOTTE NC 28202
Vimal Kapur officer: President & CEO, HBT C/O HONEYWELL 300 S. TRYON STREET, CHARLOTTE NC 07950
Billal Hammoud officer: President & CEO, HBT 855 S. MINT STREET, CHARLOTTE NC 28202
George Koutsaftes officer: President and CEO, SPS 855 S. MINT STREET, CHARLOTTE NC 28202
Karen Mattimore officer: SrVP, HR and Communications 300 SOUTH TRYON STR, CHARLOTTE NC 28202
Lucian Boldea officer: President and CEO, PMT 855 S. MINT STREET, CHARLOTTE NC 28202
Robin Watson director 855 S. MINT STREET, CHARLOTTE NC 28202
Gregory P Lewis officer: SVP & Chief Financial Officer C/O HONEYWELL INTERNATIONAL INC., 300 SOUTH TRYON STREET, CHARLOTTE NC 28202
Kevin Dehoff officer: President and CEO, HCE 855 S. MINT STREET, CHARLOTTE NC 28202
Rose Lee director C/O CROWN HOLDINGS, INC., 770 TOWNSHIP LINE ROAD, YARDLEY PA 19067
Que Dallara officer: Pres/CEO -Connected Enterprise C/O HONEYWELL 300 S. TRYON STREET, CHARLOTTE NC 28202
Doug Wright officer: President & CEO, HBT 855 S. MINT STREET, CHARLOTTE NC 28202
D Scott Davis director 115 TABOR ROAD, MORRIS PLAINS NJ 07950
Rajeev Gautam officer: Pres. and CEO, PMT C/O HONEYWELL, 300 S. TRYON STREET, CHARLOTTE NC 28202