Chia Hsin Cement (TPE:1103) Probability of Financial Distress (%) : 0.02% (As of May. 19, 2024)

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What is Chia Hsin Cement 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, Chia Hsin Cement'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 Chia Hsin Cement's Probability of Financial Distress (%)

For the Building Materials subindustry, Chia Hsin Cement'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.

Chia Hsin Cement's Probability of Financial Distress (%) Distribution in the Building Materials Industry

For the Building Materials industry and Basic Materials sector, Chia Hsin Cement's Probability of Financial Distress (%) distribution charts can be found below:

* The bar in red indicates where Chia Hsin Cement's Probability of Financial Distress (%) falls into.

Chia Hsin Cement 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

-8.60

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).

Chia Hsin Cement (TPE:1103) 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.

Chia Hsin Cement Probability of Financial Distress (%) Related Terms

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Chia Hsin Cement (TPE:1103) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Building Materials » Chia Hsin Cement Corp (TPE:1103) » Definitions » Probability of Financial Distress (%)

Comparable Companies

Traded in Other Exchanges

N/A

Address

Zhongshan North Road, Jiaxin Building, No. 96, Section 2, Zhongshan District, Taipei, TWN, 10449

Website

https://www.chcgroup.com.tw

Chia Hsin Cement Corp is a Taiwan-based company that operates through given segments. Its cement segment, which accounts for the majority of the company's revenue, manufactures and distributes cement and clinker in Taiwan and mainland China markets, and owns a minority stake in Taiwan-based cement and clinker maker TCC International. Its real estate segment engages in the leasing of a number of commercial buildings in Taiwan. Its Warehousing and storage segment engages in loading and unloading coal, sands, and other bulk cargo in the Port of Taipei and the Hospitality and catering services segment is in charge of catering and room service in the hotel and the maternal and child care center. The company also operates a hotel in Rome, Italy.

Chia Hsin Cement (TPE:1103) Headlines

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