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Cardinal Health (Cardinal Health) Altman Z-Score : 5.00 (As of Apr. 25, 2024)


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What is Cardinal Health 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 5 is strong.

Cardinal Health has a Altman Z-Score of 5.00, 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 Cardinal Health's Altman Z-Score or its related term are showing as below:

CAH' s Altman Z-Score Range Over the Past 10 Years
Min: 3.57   Med: 4.39   Max: 5.17
Current: 5

During the past 13 years, Cardinal Health's highest Altman Z-Score was 5.17. The lowest was 3.57. And the median was 4.39.


Cardinal Health Altman Z-Score Historical Data

The historical data trend for Cardinal Health'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.

Cardinal Health Altman Z-Score Chart

Cardinal Health Annual Data
Trend Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22 Jun23
Altman Z-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 4.20 3.81 4.06 4.34 5.07

Cardinal Health Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
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 4.61 4.90 5.07 5.09 4.99

Competitive Comparison of Cardinal Health's Altman Z-Score

For the Medical Distribution subindustry, Cardinal Health'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.


Cardinal Health's Altman Z-Score Distribution in the Medical Distribution Industry

For the Medical Distribution industry and Healthcare sector, Cardinal Health's Altman Z-Score distribution charts can be found below:

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



Cardinal Health 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.

Cardinal Health'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*-0.0135+1.4*-0.0091+3.3*0.0256+0.6*0.5035+1.0*4.6411
=5.00

* 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 Dec. 2023:
Total Assets was $46,573 Mil.
Total Current Assets was $37,658 Mil.
Total Current Liabilities was $38,286 Mil.
Retained Earnings was $-425 Mil.
Pre-Tax Income was 490 + -26 + 121 + 544 = $1,129 Mil.
Interest Expense was -8 + -14 + -15 + -28 = $-65 Mil.
Revenue was 57445 + 54763 + 53453 + 50487 = $216,148 Mil.
Market Cap (Today) was $25,184 Mil.
Total Liabilities was $50,020 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
=(37658 - 38286)/46573
=-0.0135

X2=Retained Earnings/Total Assets
=-425/46573
=-0.0091

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(1129 - -65)/46573
=0.0256

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=25184.361/50020
=0.5035

X5=Revenue/Total Assets
=216148/46573
=4.6411

The zones of discrimination were as such:

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

Cardinal Health has a Altman Z-Score of 5.00 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.


Cardinal Health  (NYSE:CAH) 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.


Cardinal Health Altman Z-Score Related Terms

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


Cardinal Health (Cardinal Health) Business Description

Address
7000 Cardinal Place, Dublin, OH, USA, 43017
Cardinal Health is one of three leading pharmaceutical wholesalers in the U.S., engaged in sourcing and distributing of branded, generic, and specialty pharmaceutical products to pharmacies (retail chains, independent, and mail order), hospitals networks, and healthcare providers. Along with Cencora and McKesson, the three comprise well over 90% of the U.S. pharmaceutical wholesale industry. Cardinal Health also supplies medical-surgical products and equipment to healthcare facilities in North America, Europe, and Asia.
Executives
Deborah Weitzman officer: CEO, Pharmaceutical Segment 600 WEST 22ND STREET, SUITE 300, OAK BROOK IL 60523
Mary C. Scherer officer: Chief Accounting Officer 6026 LUDWIG STREET, POWELL OH 43065
Ola M Snow officer: Chief Human Resources Officer 7000 CARDINAL PLACE, DUBLIN OH 43017
Stephen M Mason officer: CEO, Medical Segment 7000 CARDINAL PLACE, DUBLIN OH 43017
Jessica L Mayer officer: Chief Legal/Compliance Officer 7000 CARDINAL PLACE, DUBLIN OH 43017
Michelle D. Greene officer: Chief Information Officer 1141 N. OLD WORLD 3RD STREET, UNIT # 2414, MILWAUKEE WI 53203
Aaron E Alt officer: Chief Financial Officer 3001 COLORADO BLVD., DENTON TX 76210
Michelle Brennan director 1855 S. GRANT STREET, SAN MATEO CA 94402
Sujatha Chandrasekaran director 77 HOT METAL STREET, PITTSBURGH PA 15203
Christine Mundkur director
Steven Barg director ELLIOTT MANAGEMENT CORPORATION, 40 WEST 57TH STREET, NEW YORK NY 10019
Patricia M English officer: Chief Accounting Officer 7000 CARDINAL PLACE, DUBLIN OH 43017
Sheri H. Edison director 1069 STATE ROUTE 46 EAST, BATESVILLE IN 47006
Jason M. Hollar officer: Chief Financial Officer 3333 BEVERLY ROAD, HOFFMAN ESTATES IL 60179
John H Weiland director C/O C.R BARD INC, 730 CENTRAL AVE, MURRAY HILL NJ 07974

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