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KMT (Kennametal) Altman Z-Score : 2.95 (As of Oct. 31, 2024)


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What is Kennametal 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.

Warning Sign:

Altman Z-score of 2.95 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.

Kennametal has a Altman Z-Score of 2.95, indicating it is in Grey Zones. This implies that Kennametal is in some kind of financial stress. If it is below 1.81, the company may face bankrupcy risk.

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 Kennametal's Altman Z-Score or its related term are showing as below:

KMT' s Altman Z-Score Range Over the Past 10 Years
Min: 2.15   Med: 2.89   Max: 3.65
Current: 2.95

During the past 13 years, Kennametal's highest Altman Z-Score was 3.65. The lowest was 2.15. And the median was 2.89.


Kennametal Altman Z-Score Historical Data

The historical data trend for Kennametal'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.

Kennametal Altman Z-Score Chart

Kennametal Annual Data
Trend Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22 Jun23 Jun24
Altman Z-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 2.15 2.99 2.80 3.06 2.88

Kennametal 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 3.06 2.97 2.97 2.92 2.88

Competitive Comparison of Kennametal's Altman Z-Score

For the Tools & Accessories subindustry, Kennametal'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.


Kennametal's Altman Z-Score Distribution in the Industrial Products Industry

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

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



Kennametal 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.

Kennametal'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*0.2343+1.4*0.4675+3.3*0.0683+0.6*1.6238+1.0*0.8175
=2.95

* 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 $2,504 Mil.
Total Current Assets was $1,003 Mil.
Total Current Liabilities was $416 Mil.
Retained Earnings was $1,170 Mil.
Pre-Tax Income was 55.177 + 28.526 + 22.319 + 38.428 = $144 Mil.
Interest Expense was -6.247 + -6.777 + -6.847 + -6.601 = $-26 Mil.
Revenue was 543.308 + 515.794 + 495.32 + 492.476 = $2,047 Mil.
Market Cap (Today) was $1,973 Mil.
Total Liabilities was $1,215 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
=(1002.592 - 415.961)/2503.758
=0.2343

X2=Retained Earnings/Total Assets
=1170.482/2503.758
=0.4675

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(144.45 - -26.472)/2503.758
=0.0683

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=1973.177/1215.159
=1.6238

X5=Revenue/Total Assets
=2046.898/2503.758
=0.8175

The zones of discrimination were as such:

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

Kennametal has a Altman Z-Score of 2.95 indicating it is in Grey Zones.

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


Kennametal  (NYSE:KMT) 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.


Kennametal Altman Z-Score Related Terms

Thank you for viewing the detailed overview of Kennametal's Altman Z-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


Kennametal Business Description

Traded in Other Exchanges
N/A
Address
525 William Penn Place, Suite 3300, Pittsburgh, PA, USA, 15219
Kennametal Inc is a manufacturer of metalworking tools and wear-resistant engineered components and coatings. The company operates in two business segments; Metal Cutting and Infrastructure. It generates maximum revenue from the Metal Cutting segment. The Metal Cutting segment develops and manufactures high-performance tooling and metal cutting products and services and offers an assortment of standard and custom metal cutting solutions to diverse end markets, including aerospace, general engineering, energy, and transportation. Geographically, it derives maximum revenue from the United States and the rest from Germany, China, Canada, India, Italy, and other countries.
Executives
John Wayne Witt officer: Vice President 525 WILLIAM PENN PLACE, SUITE 3300, PITTSBURGH PA 15219
Sanjay Chowbey officer: Vice President 525 WILLIAM PENN PLACE, SUITE 3300, PITTSBURGH PA 15219
Michelle R Keating officer: Vice President 525 WILLIAM PENN PLACE, 33RD FLOOR, PITTSBURGH PA 15219
William J. Harvey director 26 PHEASANT'S RIDGE SOUTH, GREENVILLE DE 19807
Cindy L Davis director 2635 SW GRENWOLDE PLACE, PORTLAND OR 97201
William M Lambert director C/O MSA SAFETY, 1000 CRANBERRY WOODS DRIVE, CRANBERRY TWP PA 16066
Joseph Alvarado director 705 N. BAR Y ROAD, P.O. BOX 11368, JACKSON WY 83002
Christopher Rossi officer: President and CEO C/O KENNAMETAL INC., 525 WILLIAM PENN PLACE, 33RD FLOOR, PITTSBURGH PA 15219
Franklin Cardenas officer: Vice President 525 WILLIAM PENN PLACE, SUITE 3300, PITTSBURGH PA 15219
Steven H Wunning director 471 EAST HIGH POINT DRIVE, PEORIA IL 61614
Lorraine M Martin director 1121 SPRING LAKE DRIVE, ITASCA IL 60143
Paul Sternlieb director 70 WEST MADISON SUITE 4400, CHICAGO IL 60602
Judith L Bacchus officer: Vice President 525 WILLIAM PENN PLACE, 33RD FLOOR, PITTSBURGH PA 15219
Patrick S Watson officer: Vice President 525 WILLIAM PENN PLACE, 33RD FLOOR, PITTSBURGH PA 15219
Ronald L Port officer: Vice President 525 WILLIAM PENN PLACE, 33RD FLOOR, PITTSBURGH PA 15219