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Incitec Pivot (ASX:IPL) Altman Z-Score : 2.10 (As of Apr. 27, 2024)


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What is Incitec Pivot Altman Z-Score?

The Altman Z-Score is a model designed to predict the likelihood of a company going bankrupt within the next two years. Created by American finance professor Edward Altman in 1968, the model is specifically designed for publicly traded manufacturing companies with assets greater than $1 million.

Warning Sign:

Altman Z-score of 2.1 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.

Incitec Pivot has a Altman Z-Score of 2.10, indicating it is in Grey Zones. This implies that Incitec Pivot is in some kind of financial stress. If it is below 1.81, the company may face bankrupcy risk.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The historical rank and industry rank for Incitec Pivot's Altman Z-Score or its related term are showing as below:

ASX:IPL' s Altman Z-Score Range Over the Past 10 Years
Min: 1.34   Med: 1.67   Max: 2.33
Current: 2.1

During the past 13 years, Incitec Pivot's highest Altman Z-Score was 2.33. The lowest was 1.34. And the median was 1.67.


Incitec Pivot Altman Z-Score Historical Data

The historical data trend for Incitec Pivot's Altman Z-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Incitec Pivot Altman Z-Score Chart

Incitec Pivot Annual Data
Trend Sep14 Sep15 Sep16 Sep17 Sep18 Sep19 Sep20 Sep21 Sep22 Sep23
Altman Z-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 1.34 1.37 1.71 2.33 2.21

Incitec Pivot Semi-Annual Data
Mar14 Sep14 Mar15 Sep15 Mar16 Sep16 Mar17 Sep17 Mar18 Sep18 Mar19 Sep19 Mar20 Sep20 Mar21 Sep21 Mar22 Sep22 Mar23 Sep23
Altman Z-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.71 - 2.33 - 2.21

Competitive Comparison of Incitec Pivot's Altman Z-Score

For the Specialty Chemicals subindustry, Incitec Pivot's Altman Z-Score, along with its competitors' market caps and Altman Z-Score 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.


Incitec Pivot's Altman Z-Score Distribution in the Chemicals Industry

For the Chemicals industry and Basic Materials sector, Incitec Pivot's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Incitec Pivot's Altman Z-Score falls into.



Incitec Pivot Altman Z-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

Incitec Pivot's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*0.2793+1.4*0.2348+3.3*0.0444+0.6*1.2921+1.0*0.5131
=2.10

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Sep. 2023:
Total Assets was A$10,545 Mil.
Total Current Assets was A$4,253 Mil.
Total Current Liabilities was A$1,307 Mil.
Retained Earnings was A$2,476 Mil.
Pre-Tax Income was A$317 Mil.
Interest Expense was A$-150 Mil.
Revenue was A$5,411 Mil.
Market Cap (Today) was A$5,322 Mil.
Total Liabilities was A$4,119 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(4253.2 - 1307.4)/10545.3
=0.2793

X2=Retained Earnings/Total Assets
=2475.9/10545.3
=0.2348

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(317.4 - -150.3)/10545.3
=0.0444

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=5321.697/4118.6
=1.2921

X5=Revenue/Total Assets
=5410.9/10545.3
=0.5131

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

Incitec Pivot has a Altman Z-Score of 2.10 indicating it is in Grey Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


Incitec Pivot  (ASX:IPL) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


Incitec Pivot Altman Z-Score Related Terms

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Incitec Pivot (ASX:IPL) Business Description

Traded in Other Exchanges
Address
28 Freshwater Place, Level 8, Southbank, Melbourne, VIC, AUS, 3006
Incitec Pivot is a leading global explosives company with operations in Australia, Asia, and the Americas. We estimate its share of the global commercial explosives market at about 15%. Explosives contributes around 80% of EBIT. Incitec Pivot is also a major Australian fertilizer producer and distributor and is the only Australian manufacturer of ammonium phosphates and urea. Ammonium phosphates are sold in the domestic market and exported.

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