Marathon Petroleum (Marathon Petroleum) Probability of Financial Distress (%) : 0.02% (As of Apr. 27, 2024)

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What is Marathon Petroleum 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, Marathon Petroleum'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 Marathon Petroleum's Probability of Financial Distress (%)

For the Oil & Gas Refining & Marketing subindustry, Marathon Petroleum'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.

Marathon Petroleum's Probability of Financial Distress (%) Distribution in the Oil & Gas Industry

For the Oil & Gas industry and Energy sector, Marathon Petroleum's Probability of Financial Distress (%) distribution charts can be found below:

* The bar in red indicates where Marathon Petroleum's Probability of Financial Distress (%) falls into.

Marathon Petroleum 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

-8.65

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

NIMTAAVG	=	Net Income	/	Market Total Assets
	=	Net Income	/	(Market Cap + Total Liabilities)

*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

TLMTA

Total Liabilities

Market Total Assets

3. CASHMTA = Cash to Market Total Assets

For non-financial companies, CASHMTA is measured as:

CASHMTA

Cash, Cash Equivalents, Marketable Securities

Market Total Assets

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

MB	=	Market Cap	/	Adjusted Book Equity
	=	Market Cap	/	(Total Stockholders Equity + 0.1 * ( Market Cap - Total Stockholders Equity))

8. PRICE

PRICE is measured as the log of the stock price, capped at log(15).

Marathon Petroleum (NYSE:MPC) Probability of Financial Distress (%) Explanation

Like the Altman Z-Score, the PFD measures a company's bankruptcy risk in the upcoming year. 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.

Marathon Petroleum Probability of Financial Distress (%) Related Terms

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Marathon Petroleum (Marathon Petroleum) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Energy » Oil & Gas » Marathon Petroleum Corp (NYSE:MPC) » Definitions » Probability of Financial Distress (%)

Comparable Companies

Traded in Other Exchanges

MPC:Mexico MPN:Germany MPN:Germany M1PC34:Brazil MPC:Austria

Address

539 South Main Street, Findlay, OH, USA, 45840-3229

Website

https://www.marathonpetroleum.com

Marathon Petroleum is an independent refiner with 13 refineries in the midcontinent, West Coast, and Gulf Coast of the United States with total throughput capacity of 2.9 million barrels per day. Its Dickinson, North Dakota, facility produces 184 million gallons a year of renewable diesel. Its Martinez, California, facility will have the ability to produce 730 million gallons a year of renewable diesel once converted. The firm also owns and operates midstream assets primarily through its listed master limited partnership, MPLX.

Executives

Carl Kristopher Hagedorn	officer: Senior VP and Controller	C/O CONE MIDSTREAM PARTNERS LP, 1000 CONSOL ENERGY DRIVE, CANONSBURG PA 15317
Rucker Kim K.w.	director	KRAFT FOODS GROUP, INC., THREE LAKES DRIVE, NORTHFIELD IL 60093
Shawn M Lyon	officer: SVP Log & Storage, MPLX GP LLC	C/O MPLX, 200 E HARDIN STREET, FINDLAY OH 45840
Gregory Scott Floerke	officer: Ex VP & COO, MPLX GP LLC	C/O MARKWEST ENERGY PARTNERS, L.P., 1515 ARAPAHOE STREET, TOWER 1, SUITE 160, DENVER CO 80202
Timothy J Aydt	officer: Ex VP and CCO, MPLX GP LLC	C/O MPLX LP, 200 E. HARDIN STREET, FINDLAY OH 45840
Toni Townes-whitley	director	8340 SPRINGHAVEN GARDEN LANE, MCLEAN, VA X1 22102
Michael J Hennigan	officer: President & CEO, MPLX GP LLC	3807 WEST CHESTER PIKE, NEWTOWN SQUARE PA 19073
Suzanne Gagle	officer: VP and General Counsel	C/O MPC, FINDLAY OH 45840
Thomas Kaczynski	officer: VP, Finance and Treasurer	C/O MARATHON PETROLEUM CORPORATION, FINDLAY OH 45840
Raymond L Brooks	officer: Sr. VP, Refining	C/O MPC, FINDLAY OH 45840
Charles E Bunch	director	PPG INDUSTRIES INC., ONE PPG PLACE, PITTSBURGH PA 15272
Brian C Davis	officer: Exec VP, Chief Commercial Ofc	C/O MARATHON PETROLEUM CORPORATION, 539 S. MAIN STREET, FINDLAY OH 45840
Maryann T. Mannen	officer: Exec VP & Chief Fin Ofc	C/O MARATHON PETROLEUM CORPORATION, 539 SOUTH MAIN ST, FINDLAY OH 45840
Jonathan Z Cohen	director	1845 WALNUT STREET, 10TH FLOOR, PHILADELPHIA PA 19103
James E Rohr	director	249 FIFTH AVE, P1-POPP-30-1, PITTSBURGH PA 15222