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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.
Preferred Apartment Communities has a Altman Z-Score of 0.63, 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 Preferred Apartment Communities's Altman Z-Score or its related term are showing as below:
The historical data trend for Preferred Apartment Communities'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.
Preferred Apartment Communities Annual Data | |||||||||||||||||||||
Trend | Dec12 | Dec13 | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | |||||||||||
Altman Z-Score | Get a 7-Day Free Trial | 0.59 | 0.43 | 0.42 | 0.17 | 0.47 |
Preferred Apartment Communities Quarterly Data | ||||||||||||||||||||
Jun17 | Sep17 | Dec17 | Mar18 | Jun18 | Sep18 | Dec18 | Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | |
Altman Z-Score | Get a 7-Day Free Trial | 0.33 | 0.33 | 0.40 | 0.47 | 0.62 |
For the REIT - Diversified subindustry, Preferred Apartment Communities'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.
For the REITs industry and Real Estate sector, Preferred Apartment Communities's Altman Z-Score distribution charts can be found below:
* The bar in red indicates where Preferred Apartment Communities's Altman Z-Score falls into.
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.
Preferred Apartment Communities'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 | * | 0.0884 | + | 1.4 | * | -0.0481 | + | 3.3 | * | 0.0305 | + | 0.6 | * | 0.6231 | + | 1.0 | * | 0.1177 | |
= | 0.63 |
* 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 Mar. 2022:
Total Assets was $3,740.3 Mil.
Total Current Assets was $470.4 Mil.
Total Current Liabilities was $139.7 Mil.
Retained Earnings was $-179.8 Mil.
Pre-Tax Income was -7.844 + 11.659 + 10.025 + 1.557 = $15.4 Mil.
Interest Expense was -23.16 + -23.28 + -24.847 + -27.296 = $-98.6 Mil.
Revenue was 104.88 + 105.724 + 111.012 + 118.706 = $440.3 Mil.
Market Cap (Today) was $1,611.1 Mil.
Total Liabilities was $2,585.7 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 | |
= | (470.442 - 139.725) | / | 3740.272 | |
= | 0.0884 |
X2 | = | Retained Earnings | / | Total Assets |
= | -179.814 | / | 3740.272 | |
= | -0.0481 |
X3 | = | Earnings Before Interest and Taxes | / | Total Assets |
= | (Pre-Tax Income - Interest Expense) | / | Total Assets | |
= | (15.397 - -98.583) | / | 3740.272 | |
= | 0.0305 |
X4 | = | Market Value Equity | / | Book Value of Total Liabilities |
= | Market Cap | / | Total Liabilities | |
= | 1611.074 | / | 2585.652 | |
= | 0.6231 |
X5 | = | Revenue | / | Total Assets |
= | 440.322 | / | 3740.272 | |
= | 0.1177 |
The zones of discrimination were as such:
Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones
Preferred Apartment Communities has a Altman Z-Score of 0.63 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.
Preferred Apartment Communities (NYSE:APTS) 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.
Thank you for viewing the detailed overview of Preferred Apartment Communities's Altman Z-Score provided by GuruFocus.com. Please click on the following links to see related term pages.
Sara Finley | director | ONE CVS DRIVE, WOONSOCKET RI 02895 |
Jeffrey David Sherman | officer: PRESIDENT - MULTIFAMILY | 3284 NORTHSIDE PARKWAY NW SUITE 150 ATLANTA GA 30327 |
Michael Aide | officer: PRESIDENT - RETAIL | 3284 NORTHSIDE PARKWAY NW SUITE 150 ATLANTA GA 30327 |
John A Isakson | officer: CHIEF FINANCIAL OFFICER | 3284 NORTHSIDE PARKWAY, NW, SUITE 150, ATLANTA GA 30327 |
Jeffrey R Sprain | officer: EVP, GENERAL COUNSEL AND SEC. | 3284 NORTHSIDE PARKWAY, NW, SUITE 150 ATLANTA GA 30327 |
Daphne Bryson Jackson | director | 3284 NORTHSIDE PARKWAY NW SUITE 150 ATLANTA GA 30327 |
John M Cannon | director | 3284 NORTHSIDE PARKWAY NW SUITE 150 ATLANTA GA 30327 |
Daniel M Dupree | director | 2500 WINDY RIDGE PARKWAY SUITE 1600, ATLANTA GA 30339 |
Parker Boone Dupree | officer: President - Office | 3284 NORTHSIDE PARKWAY NW SUITE 150 ATLANTA GA 30327 |
Joel T Murphy | director, officer: See Remarks | 2500 WINDY RIDGE PARKWAY, SUITE 1600, ATLANTA GA 30339 |
Michael Joseph Cronin | officer: See Remarks | 3625 CUMBERLAND BOULDEVARD SUITE 400 ATLANTA GA 30339 |
Steve Bartkowski | director | 3625 CUMBERLAND BOULDEVARD SUITE 400 ATLANTA GA 30339 |
Gary B Coursey | director | |
Gresham William J Jr | director | 1010 RICHMOND HILL DRIVE MARIETTA GA 30068 |
Timothy Alan Peterson | director | 3625 CUMBERLAND BOULDEVARD SUITE 400 ATLANTA GA 30339 |
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