What is Dropbox Probability of Financial Distress (%)?
Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, Dropbox's Probability of Financial Distress (%) is 0.07%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
Competitive Comparison of Dropbox's Probability of Financial Distress (%)
For the Software - Infrastructure subindustry, Dropbox's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) 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.
Dropbox's Probability of Financial Distress (%) Distribution in the Software Industry
For the Software industry and Technology sector, Dropbox's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Dropbox's Probability of Financial Distress (%) falls into.
Dropbox Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
| LPFD | = | -20.12 * NIMTAAVG | + | 1.60 * TLMTA | - | 7.88 * EXRETAVG | + | 1.55 * SIGMA | - | 0.005 * RSIZE | - | 2.27 * CASHMTA | + | 0.070 * MB | - | 0.09 * PRICE | - | 8.87 |
| = | -7.25 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.07% |
The eight explanatory variables are:
1. NIMTAAVG = Net Income to Market Total Assets
*Note that for companies reported quarterly, geometrically declining weighted quarterly Net Income data in latest four quarters are used.
2. TLMTA = Total liabilities to Market Total Assets
3. CASHMTA = Cash to Market Total Assets
For non-financial companies, CASHMTA is measured as:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
6. RSIZE = Relative Size
| RSIZE | = | log (Market Cap | / | Total Market Cap of S&P 500 companies) |
7. MB = Market to Adjusted Book Equity Ratio
8. PRICE
PRICE is measured as the log of the stock price, capped at log(15).
Dropbox (Dropbox) Business Description
Traded in Other Exchanges
Address
1800 Owens Street, San Francisco, CA, USA, 94158
Dropbox is a leading provider of cloud-storage and content collaboration tools with an emphasis on individuals and SMB. The company was founded in 2007 and was a pioneer in cloud storage and cross-platform file syncing. Utilizing inorganic and organic means, the firm has been working on diversifying its product mix and pivoting away from the cloud-storage space.
Executives
| Bart Volkmer |
officer: General Counsel |
333 BRANNAN STREET, SAN FRANCISCO CA 94107 |
| Timothy Regan |
officer: Chief Accounting Officer |
333 BRANNAN STREET, SAN FRANCISCO CA 94107 |
| Andrew Houston |
director, 10 percent owner, officer: Chief Executive Officer |
333 BRANNAN STREET, SAN FRANCISCO CA 94107 |
| Karen Peacock |
director |
C/O DROPBOX, INC., 1800 OWENS STREET, SUITE 200, SAN FRANCISCO CA 94158 |
| Lisa M Campbell |
director |
C/O DOLBY LABORATORIES INC., 1275 MARKET STREET, SAN FRANCISCO CA 94103 |
| Timothy H. Young |
officer: Sr Vice President and GM, Core |
C/O DROPBOX, INC., 1800 OWENS STREET, SUITE 200, SAN FRANCISCO CA 94158 |
| Abhay Parasnis |
director |
345 PARK AVENUE, SAN JOSE CA 95110 |
| Sara Mathew |
director |
CAMPBELL SOUP COMPANY, ONE CAMPBELL PLACE, CAMDEN NJ 08103 |
| Mylod Robert J Jr |
director |
|
| Michael Seibel |
director |
C/O DROPBOX, INC., 1800 OWENS STREET, SAN FRANCISCO CA 94158 |
| Ajay Vashee |
officer: Chief Financial Officer |
333 BRANNAN STREET, SAN FRANCISCO CA 94107 |
| Donald W Blair |
director |
ONE RIVERFRONT PLAZA, CORNING NY 14831 |
| Arash Ferdowsi |
director, 10 percent owner, officer: Co-Founder |
111 PINE STREET, SAN FRANCISCO CA 94111 |
| Olivia Nottebohm |
officer: Chief Operating Officer |
C/O DROPBOX. INC., 1800 OWENS STREET, SAN FRANCISCO CA 94158 |
| Quentin Clark |
officer: See Remarks |
333 BRANNAN STREET, SAN FRANCISCO CA 94107 |
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