What is United Parcel Service 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, United Parcel Service's Probability of Financial Distress (%) is 0.04%.
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 United Parcel Service's Probability of Financial Distress (%)
For the Integrated Freight & Logistics subindustry, United Parcel Service'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.
United Parcel Service's Probability of Financial Distress (%) Distribution in the Transportation Industry
For the Transportation industry and Industrials sector, United Parcel Service's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where United Parcel Service's Probability of Financial Distress (%) falls into.
United Parcel Service 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 |
| = | -7.84 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.04% |
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).
United Parcel Service (United Parcel Service) Business Description
Traded in Other Exchanges
Address
55 Glenlake Parkway, N.E. Atlanta, Atlanta, GA, USA, 30328
As the world's largest parcel delivery company, UPS manages a massive fleet of more than 500 planes and 100,000 vehicles, along with many hundreds of sorting facilities, to deliver an average of about 25 million packages per day to residences and businesses across the globe. UPS' domestic U.S. package operations generate around 64% of total revenue while international package makes up 20%. Air and ocean freight forwarding, truckload brokerage, and contract logistics make up the remainder.
Executives
| Nando Cesarone |
officer: President, UPS International |
55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328 |
| Laura J Lane |
officer: Chief Corp Affairs & Comms Off |
55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328 |
| Brian Newman |
officer: Chief Financial Officer |
55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328 |
| Brothers Norman M. Jr |
officer: Sr VP, Gen Counsel & Sec |
55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328 |
| Darrell L Ford |
officer: Chief Human Resources Officer |
55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328 |
| Kathleen M. Gutmann |
officer: Senior Vice President |
55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328 |
| Kevin M Warren |
officer: Chief Marketing Officer |
55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328 |
| Bala Subramanian |
officer: Chief Digital & Tech Officer |
55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328 |
| Philippe R Gilbert |
officer: Pres, Supply Chain Solutions |
55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328 |
| Juan R. Perez |
officer: Senior Vice President |
55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328 |
| Scott A. Price |
officer: Chief Transformation Officer |
55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328 |
| Russell Stokes |
director |
ONE FINANCIAL CENTER, SUITE 3700, BOSTON MA 02111 |
| Wayne M. Hewett |
director |
5 WESTBROOK CORPORATE CENTER, WESTCHESTER IL 60154 |
| Charlene A Thomas |
officer: Chief Human Resources Officer |
55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328 |
| Kathleen E Johnson |
director |
55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328 |
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