What is F5 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, F5's Probability of Financial Distress (%) is 0.02%.
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 F5's Probability of Financial Distress (%)
For the Software - Infrastructure subindustry, F5'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.
F5's Probability of Financial Distress (%) Distribution in the Software Industry
For the Software industry and Technology sector, F5's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where F5's Probability of Financial Distress (%) falls into.
F5 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 |
| = | -8.61 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.02% |
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).
F5 (FFIV) Business Description
Traded in Other Exchanges
Address
801 5th Avenue, Seattle, WA, USA, 98104
F5 is a market leader in the application delivery controller market. The company sells products for security, application performance, and automation. Its three customer verticals are enterprises, service providers, and government entities. Revenue is evenly split between its services business and products business with revenue trending toward products due to software adoption. The Seattle-based firm was incorporated in 1996, has about 6,500 employees, and generates about 55% its revenue within the Americas, 25% in EMEA, and 20% in APAC/Japan.
Executives
| Francis J. Pelzer |
officer: EVP, Chief Financial Officer |
CONCUR TECHNOLOGIES, INC., 18400 NE UNION HILL RD., REDMOND WA 98052 |
| Scot Frazier Rogers |
officer: Interim General Counsel |
C/O F5 NETWORKS, INC., 401 ELLIOTT AVE. WEST, SEATTLE WA 98119 |
| Chad Michael Whalen |
officer: EVP, Worldwide Sales |
C/O F5 NETWORKS, INC., 401 ELLIOTT AVE. WEST, SEATTLE WA 98119 |
| Alan Higginson |
director |
|
| Francois Locoh-donou |
director, officer: President, CEO & Director |
C/O F5 NETWORKS, INC., 401 ELLIOTT AVE. W., SEATTLE WA 98119 |
| Thomas Dean Fountain |
officer: EVP and Chief Strategy Officer |
C/O F5 NETWORKS, INC., 401 ELLIOTT AVE. WEST, SEATTLE WA 98119 |
| Tami A. Erwin |
director |
1095 AVENUE OF THE AMERICAS, NEW YORK NY 10036 |
| Ana Maria White |
officer: EVP and Chief HR Officer |
C/O F5 NETWORKS, INC., 401 ELLIOTT AVE. WEST, SEATTLE WA 98119 |
| Michael L Dreyer |
director |
C/O F5 NETWORKS, INC., 401 ELLIOTT AVE. WEST, SEATTLE WA 98119 |
| Mika Yamamoto |
officer: EVP, Chief Marketing Officer |
21300 VICTORY BLVD.,, 12TH FLOOR, WOODLAND HILLS CA 91367 |
| Geng Lin |
officer: EVP, Chief Technology Officer |
C/O F5 NETWORKS, INC., 401 ELLIOTT AVE. WEST, SEATTLE WA 98119 |
| Marianne Budnik |
director |
C/O ACME PACKET, INC., 100 CROSBY DRIVE, BEDFORD MA 01730 |
| Phillips James Malcolm Jr |
director |
C/O F5, INC., 801 FIFTH AVE., SEATTLE WA 98104 |
| Michael F Montoya |
director |
C/O F5 NETWORKS, INC., 801 FIFTH AVE., SEATTLE WA 98104 |
| Deborah L Bevier |
director |
PO BOX 91258, BELLEVUE WA 98009 |
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
FFIV has been successfully added to your