What is Snap-on 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, Snap-on'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 Snap-on's Probability of Financial Distress (%)
For the Tools & Accessories subindustry, Snap-on'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.
Snap-on's Probability of Financial Distress (%) Distribution in the Industrial Products Industry
For the Industrial Products industry and Industrials sector, Snap-on's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Snap-on's Probability of Financial Distress (%) falls into.
Snap-on 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 |
| = | -8.50 |
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).
Snap-on (Snap-on) Business Description
Traded in Other Exchanges
Address
2801 80th Street, Kenosha, WI, USA, 53143
Snap-on manufactures premium tools and software for repair professionals. Hand tools are sold through franchisee-operated mobile vans that serve auto technicians who purchase tools at their own expense. A unique element of its business model is that franchisees bear significant risk, as they must invest in the mobile van, inventory, and software. At the same time, franchisees extend personal credit directly to technicians on an individual tool basis. Snap-on currently operates three segments: repair systems and information, commercial and industrial, and tools. Its finance arm provides financing to franchisees to run their operations, which includes offering loans and leases for mobile vans.
Executives
| Thomas J Ward |
officer: Sr VP & President - Tools |
2801 80TH STREET, KENOSHA WI 53141 |
| Aldo John Pagliari |
officer: SVP-Finance & CFO |
2801 80TH STREET, KENOSHA WI 53143 |
| Nicholas T Pinchuk |
director, officer: President and CEO |
280180TH STREET, KENOSHA WI 53143 |
| June C Lemerand |
officer: VP & Chief Information Officer |
2801 80TH STREET, KENOSHA WI 53143 |
| Timothy L Chambers |
officer: Sr VP & Pres - Tools |
2801 80TH STREET, KENOSHA WI 53143 |
| Iain Boyd |
officer: V.P. - Human Resources |
2801 80TH STREET, KENOSHA WI 53143 |
| Richard Thomas Miller |
officer: VP, Gen Counsel & Secretary |
2801 80TH STREET, KENOSHA WI 53143 |
| Jesus Arregui |
officer: Sr VP & President - Commercial |
2801 80TH STREET, KENOSHA WI 53143 |
| Anup R Banerjee |
officer: Sr VP & Chief Devel. Officer |
2801 80TH STREET, KENOSHA WI 53143 |
| Karen L Daniel |
director |
2801 80TH STREET, KENOSHA WI 53141 |
| William Dudley Lehman |
director |
|
| Marty V. Ozolins |
officer: Vice President & Controller |
2801 80TH STREET, KENOSHA WI 53143 |
| Richard K Strege |
officer: Vice President & Controller |
2801 80TH STREET, KENOSHA WI 53143 |
| Irwin M Shur |
officer: VP, Gen Counsel & Secretary |
SNAP-ON INCORPORATED, 2801 80TH STREET, KENOSHA WI 53143 |
| Thomas L. Kassouf |
officer: SVP & Pres - Commercial Div |
2801 80TH STREET, KENOSHA WI 53143 |
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