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Precision Optics (Precision Optics) Probability of Financial Distress (%) : 0.05% (As of Jun. 05, 2024)


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What is Precision Optics 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, Precision Optics's Probability of Financial Distress (%) is 0.05%.

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 Precision Optics's Probability of Financial Distress (%)

For the Medical Instruments & Supplies subindustry, Precision Optics'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.


Precision Optics's Probability of Financial Distress (%) Distribution in the Medical Devices & Instruments Industry

For the Medical Devices & Instruments industry and Healthcare sector, Precision Optics's Probability of Financial Distress (%) distribution charts can be found below:

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



Precision Optics 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
=-7.56

The Probability of Financial Distress (%) (PFD) was then obtianed by:

PFD=1/(1 + e^(-LPFD))*100%
=0.05%

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


8. PRICE

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


Precision Optics  (NAS:POCI) 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.


Precision Optics Probability of Financial Distress (%) Related Terms

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Precision Optics (Precision Optics) Business Description

Traded in Other Exchanges
N/A
Address
22 East Broadway, Gardner, MA, USA, 01440
Precision Optics Corp Inc is engaged in designing, developing, and manufacturing advanced optical instruments. It manufactures medical products such as endoscopes and endocouplers which incorporate various optical technologies for use in a variety of minimally invasive surgical and diagnostic procedures. The company also produces endoscopes for various applications as well as designs and manufactures custom optical medical devices to satisfy customers' specific requirements. In addition, the company manufactures and sells components and assemblies specially designed for industrial and military use. The company earns the majority of its revenue from the United States.
Executives
Wayne M Coll officer: Chief Financial Officer
Mahesh Lawande officer: Chief Operating Officer 14 PUTNAM ROAD, ACTON MA 01720
Edward Kevin Dahill officer: Interim CFO 137 HOLLOW TREE RIDGE ROAD, DARIEN CT 06820
Peter V. Anania director, 10 percent owner C/O PRECISION OPTICS CORPORATION, INC., 22 EAST BROADWAY, GARDNER MA 01440
Norman H Pessin 10 percent owner C/O LEVY, HARKINS & CO., INC., 366 MADISON AVENUE, 14TH FLOOR, NEW YORK NY 10017
Sandra F Pessin 10 percent owner C/O NORMAN PESSIN, 366 MADISON AVENUE, 14TH FLOOR, NEW YORK NY 10017
Brian L. Pessin 10 percent owner 310 EAST 75TH STREET, APT. 2A, NEW YORK NY 10021
Jeffrey Dirubio officer: VP of Sales and Marketing 22 EAST BROADWAY, GARDNER MA 01440
Stuart Steinberg 10 percent owner 85 BELLEVUE AVENUE, RYE NY 10580
Daniel S Habhegger officer: Chief Financial Officer 22 EAST BROADWAY, GARDNER MA 01440
Divaker Mangadu officer: Pres., Ross Optical Division 22 EAST BROADWAY, GARDNER MA 01440
Hershey Strategic Capital, Lp 10 percent owner C/O HERSHEY STRATEGIC CAPITAL GP, LLC, 6 POMPANO ROAD, RUMSON NJ 07760
Peter H Woodward director 30 WEST 63RD STREET, SUITE 18G, NEW YORK NY 10023
Andrew J Miclow director C/O PRECISION OPTICS CORPORATION INC., 22 EAST BROADWAY, GARDNER MA 01440
Awm Investment Company, Inc. 10 percent owner 527 MADISON AVENUE, SUITE 2600, NEW YORK NY 10022