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Weyerhaeuser Co (Weyerhaeuser Co) Probability of Financial Distress (%) : 0.03% (As of Apr. 27, 2024)


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What is Weyerhaeuser Co 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, Weyerhaeuser Co's Probability of Financial Distress (%) is 0.03%.

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 Weyerhaeuser Co's Probability of Financial Distress (%)

For the REIT - Specialty subindustry, Weyerhaeuser Co'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.


Weyerhaeuser Co's Probability of Financial Distress (%) Distribution in the REITs Industry

For the REITs industry and Real Estate sector, Weyerhaeuser Co's Probability of Financial Distress (%) distribution charts can be found below:

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



Weyerhaeuser Co 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
=-8.29

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

PFD=1/(1 + e^(-LPFD))*100%
=0.03%

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).


Weyerhaeuser Co  (NYSE:WY) 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.


Weyerhaeuser Co Probability of Financial Distress (%) Related Terms

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Weyerhaeuser Co (Weyerhaeuser Co) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Weyerhaeuser Co (NYSE:WY) » Definitions » Probability of Financial Distress (%)
Traded in Other Exchanges
Address
220 Occidental Avenue South, Seattle, WA, USA, 98104-7800
Weyerhaeuser ranks among the world's largest forest product companies. Following the 2016 sale of its pulp business to International Paper, Weyerhaeuser operates three business segments: timberlands, wood products, and real estate. Weyerhaeuser is structured as a real estate investment trust and is not required to pay federal income taxes on earnings generated by timber harvest activities. Earnings from its wood products segment are subject to federal income tax. Weyerhaeuser acquired fellow timber REIT Plum Creek in 2016.
Executives
David M Wold officer: VP & Chief Accounting Officer C/O WEYERHAEUSER COMPANY, 220 OCCIDENTAL AVENUE SOUTH, SEATTLE WA 98104
Keith O'rear officer: Senior Vice President C/O WEYERHAEUSER COMPANY, 220 OCCIDENTAL AVENUE SOUTH, SEATTLE WA 98104
Denise M Merle officer: Senior Vice President C/O WEYERHAEUSER COMPANY, 220 OCCIDENTAL AVENUE SOUTH, SEATTLE WA 98104
Devin W Stockfish director, officer: President and CEO C/O WEYERHAEUSER COMPANY, 220 OCCIDENTAL AVENUE SOUTH, SEATTLE WA 98104
James Calvin O'rourke director C/O THE MOSAIC COMPANY, 101 EAST KENNEDY BLVD., SUITE 2500, TAMPA FL 33602
Albert Monaco director #3000, 425 - 1ST STREET SW, CALGARY A0 T2P 3L8
Travis A Keatley officer: Senior Vice President 220 OCCIDENTAL AVE SOUTH, SEATTLE WA 98104
Adrian M Blocker officer: Senior Vice President C/O WEYERHAEUSER COMPANY, 220 OCCIDENTAL AVENUE SOUTH, SEATTLE WA 98104
Nancy S. Loewe officer: Senior Vice President and CFO 351 PHELPS DRIVE, IRVING TX 75038
Russell S Hagen officer: Senior Vice President and CFO C/O WEYERHAEUSER COMPANY, 220 OCCIDENTAL AVENUE SOUTH, SEATTLE WA 98104
Deidra C Merriwether director 100 GRAINGER PARKWAY, LAKE FOREST IL 60045
Nicole Weyerhaeuser Piasecki director 2000 WELLS FARGO PLACE, 30 EAST 7TH STREET, SAINT PAUL MN 55101-4930
James A Kilberg officer: Senior Vice President C/O WEYERHAEUSER COMPANY, 220 OCCIDENTAL AVENUE SOUTH, SEATTLE WA 98104
Marc F Racicot director 1411 E. MISSION AVENUE, SPOKANE WA 99202
Lawrence A Selzer director C/O WEYERHAEUSER COMPANY, 220 OCCIDENTAL AVENUE SOUTH, SEATTLE WA 98104

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