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ADT (ADT) Altman Z-Score : 0.40 (As of Apr. 24, 2024)


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What is ADT 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 0.4 is in distress zone. This implies bankruptcy possibility in the next two years.

ADT has a Altman Z-Score of 0.40, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.

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 ADT's Altman Z-Score or its related term are showing as below:

ADT' s Altman Z-Score Range Over the Past 10 Years
Min: 0.2   Med: 0.34   Max: 0.42
Current: 0.4

During the past 10 years, ADT's highest Altman Z-Score was 0.42. The lowest was 0.20. And the median was 0.34.


ADT Altman Z-Score Historical Data

The historical data trend for ADT'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.

ADT Altman Z-Score Chart

ADT Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Altman Z-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 0.34 0.28 0.20 0.37 0.42

ADT Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
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 0.37 0.33 0.24 0.29 0.42

Competitive Comparison of ADT's Altman Z-Score

For the Security & Protection Services subindustry, ADT'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.


ADT's Altman Z-Score Distribution in the Business Services Industry

For the Business Services industry and Industrials sector, ADT's Altman Z-Score distribution charts can be found below:

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



ADT 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.

ADT'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*-0.0298+1.4*-0.2266+3.3*0.034+0.6*0.477+1.0*0.3549
=0.40

* 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 Dec. 2023:
Total Assets was $15,964 Mil.
Total Current Assets was $1,005 Mil.
Total Current Liabilities was $1,480 Mil.
Retained Earnings was $-3,618 Mil.
Pre-Tax Income was 88.562 + 20.787 + 38.811 + -179.024 = $-31 Mil.
Interest Expense was -169.769 + -147.187 + -84.282 + -171.626 = $-573 Mil.
Revenue was 1222.255 + 1237.484 + 1593.128 + 1612.354 = $5,665 Mil.
Market Cap (Today) was $5,808 Mil.
Total Liabilities was $12,175 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
=(1004.694 - 1480.208)/15964.094
=-0.0298

X2=Retained Earnings/Total Assets
=-3617.718/15964.094
=-0.2266

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(-30.864 - -572.864)/15964.094
=0.034

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=5808.186/12175.448
=0.477

X5=Revenue/Total Assets
=5665.221/15964.094
=0.3549

The zones of discrimination were as such:

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

ADT has a Altman Z-Score of 0.40 indicating it is in Distress Zones.

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


ADT  (NYSE:ADT) 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.


ADT Altman Z-Score Related Terms

Thank you for viewing the detailed overview of ADT's Altman Z-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


ADT (ADT) Business Description

Traded in Other Exchanges
Address
1501 Yamato Road, Boca Raton, FL, USA, 33431
ADT Inc is a provider of monitored security, interactive home and business automation, and related monitoring services in the United States and Canada. It offers residential, commercial, and multi-site customers a comprehensive set of burglary, video, access control, fire and smoke alarm, and medical alert solutions. The company segments include Consumer and Small Business (CSB), Commercial, and Solar. It generates maximum revenue from the Commercial segment.
Executives
David A. Scott officer: EVP, Chief People & Admin. Off 9601 S. MERIDIAN BLVD., ENGLEWOOD CO 80112
Marques Coleman director 1501 YAMATO ROAD, BOCA RATON FL 33431
Nicole Bonsignore director 1501 YAMATO ROAD, BOCA RATON FL 33431
Wayne Thorsen officer: EVP, Chief Business Officer 3892 RONDA ROAD, PEBBLE BEACH CA 93953
Delu Jackson officer: EVP, Chief Marketing Officer 650 TENNIS CLUB DRIVE, APT. L107, FORT LAUDERDALE FL 33311
Jamie Elizabeth Haenggi officer: SVP, Chief Sales & Mktg. Off. 1501 YAMATO ROAD, BOCA RATON FL 33431
Kenneth Porpora officer: SVP, Chief Growth Officer 1501 YAMATO ROAD, BOCA RATON FL 33431
James David Devries officer: President ALLSTATE INSURANCE COMPANY, 2775 SANDERS ROAD, NORTHBROOK IL 60062
Donald M. Young officer: SVP & Chief Info Off. 1501 YAMATO ROAD, BOCA RATON FL 33431
David W Smail officer: EVP, CLO and Secretary 1501 YAMATO ROAD, BOCA RATON FL 33431
Daniel Bresingham officer: EVP, Chief Admin. Off. & Treas 1501 YAMATO ROAD, BOCA RATON FL 33431
State Farm Mutual Automobile Insurance Co 10 percent owner ONE STATE FARM PLAZA, BLOOMINGTON IL 61710
Paul Joseph Smith director ONE STATE FARM PLAZA E-12, BLOOMINGTON IL 61710-0001
Lewis William M Jr director 9 WEST 57TH STREET, NEW YORK NY 10019
Benjamin Honig director 1501 YAMATO ROAD, BOCA RATON FL 33431

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