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Strategies & Market Trends : Bankruptcy Predictor Model -- Ignore unavailable to you. Want to Upgrade?

To: Razorbak who wrote (99)	3/20/1999 7:41:00 AM
From: Greg Jung	Read Replies (1) \| Respond to of 477

Razorbak, thanks for the score on hmar. Under static conditions hmar goes down. If world recession continues the company is in trouble. However economic data are not static, especially earnings of companies. So the more important question requires a time parameter. In hmar case their most recent earnings were +0.12: I presume this could be maintained indefinitely without further financing or restructuring. Presuming they were instead to lose 0.12 each quarter how long before an "investment event" is needed.

To: Razorbak who wrote (99)	3/20/1999 3:07:00 PM
From: Mad2	Respond to of 477

ELBO (NASDAQ, Eletronics Boutique) Heres a retailer that I've been following trading near it's ipo price of last summer. I'm not in it but find it a interesting stock and may take a position. Couple of notes of interest. They have 42 mil of cash in current assets (rest is inventory), no debit, what appears to be a good web site that they report generated 5,0 mil in sales in past year. This company seems to be similar to EGGS, excepting they lean towards the electonic games, orientated towards youth that like to hang around the malls. Two brokers are covering ELBO both with a strong buy recomendation. While they score high on the Altman indicator, the strength comes from the Sales volume and market valuation. Lastly they may draw a negative with casual lookers as their year over year net income actually dropped as in 1997 they paid little to no taxes using up tax loss carry forwards. However 97 EBIT was 20.5 mil (4.6% of revenue) and 98 EBIT came in at 32.4 mil (5.7 % of revenue) with no debit. While retailing seems to be a bit out of favor in liew of e-commerce this seems to be they type of retailer (niche) that serves the convience buyer with small (strip and larger mall) stores. Interesting to me at this point! ITEM 2/1/98 Total Sales (2/1/98-1/31/99) 570 Total Assets 172 Retained Earnings 17.7 EBIT 32.4 Market Value Equity (3/19/99) 295.8 Book Value Liabilities 123.2 Current Assets 117.6 Current Liabilities 120.7 Working Capital -3.1 Number Shares 20.4 Share Price (3/19/99) 14.5 Altman bankruptcy Predictor (Z) Z=(1.2X1)+(1.4X2)+(3.3X3)+(.6X4)+(1.0*X5) Working Capital/Total Assets X1 -0.02 Retained Earnings/Total Assets X2 0.10 EBIT/Total Assets X3 0.19 Market Value Equity/Book Value Liabilities X4 2.40 Total Sales/Total Assets X5 3.31 Z=1.2(-.02)+1.4(.2)+3.3(.19)+.6(2.4)+1.0(3.31) Z= 5.498607671

To: Razorbak who wrote (99)	4/2/1999 6:23:00 PM
From: Razorbak	Read Replies (2) \| Respond to of 477

Hvide Marine Inc. (NASDAQ:HMAR), Rev. 1 ------------------------------------------------------- Analysis: Altman Bankruptcy Predictor Company Name: Hvide Marine Inc. Ticker Symbol: NASDAQ:HMAR Date of Analysis: 4/2/99 Conducted by: Samuel M. Williams Vice President Turnaround & Crisis Management, Inc. Two Mid America Plaza, Suite 714 Oakbrook Terrace, IL 60181 Tel: 630-990-9718 Fax: 630-990-9693 E-mail: sam@turnrnd.com turnrnd.com ------------------------------------------------------------- Financial Summary, USD thousands (1) 9/30/98Q 12/31/98A ------------------------------------------------------------- Working Capital, WC 41.56 (205.03) Retained Earnings, RE 49.28 51.20 Earnings B4 Interest & Taxes, EBIT 88.50 84.96 Market Value of Equity, MVE 109.90 77.10 Book Value of Tot. Liab., BVTL 707.93 735.18 Total Sales, TS 363.37 401.91 Total Assets, TA 1,076.37 1,108.83 ------------------------------------------------------------- Altman's Financial Ratios 9/30/98Q 12/31/98A ------------------------------------------------------------- X1 = WC/TA 0.04 (0.18) X2 = RE/TA 0.05 0.05 X3 = EBIT/TA 0.08 0.08 X4 = MVE/BVTL 0.16 0.10 X5 = TS/TA 0.34 0.36 ------------------------------------------------------------- Bankruptcy Predictor Index, Z (2) 0.81 0.52 ------------------------------------------------------------- Company Health Assessment (3,4,5) Near Near Death Death ------------------------------------------------------------- Footnotes: ---------- 1. Data obtained from the 9/30/98 10-Q, the 12/31/97 10-K, the 9/30/97 10Q, and the 12/31/98 10-K. MVE of the common shares (Classes A & B) valued at $7.188/share for both classes on 9/30/98, and $5.00/share for both classes on 12/31/98, the respective closing prices for the Class A common on each date. 2. Bankruptcy Predictor Index: Z = (1.2X1)+(1.4X2)+(3.3X3)+(0.6X4)+(1.0*X5) 3. Company Health Assessment: Z > 3.0 = Strong 1.8 < Z < 3.0 = In Danger Z < 1.8 = Near Death 4. The Altman Bankruptcy Predictor is widely used in the turnaround industry to assess and predict a company's short-term survival prospects. The model is named after the renowned Edward I. Altman, Max L. Heine Professor of Finance at New York University's Stern School of Business, who published the initial research back in 1968. According to one scholarly journal, Altman's Bankruptcy Predictor has proven consistently accurate over the period of time since its development. The original samples in Altman's research displayed accuracy of 95 percent based on data from approximately one year prior to failure. The accuracy dropped to 72 percent based on two-year data. Subsequent tests on firms that have gone bankrupt since 1968 have shown an accuracy level of 82 to 85 percent. 5. CAUTION!!! This analysis should only be used as an analytical tool. While it can greatly assist an investor or stakeholder in identifying weak companies for further investigation, it should not be used to the exclusion of other types of experienced and informed personal evaluation techniques. Also, please remember that, when using the Bankruptcy Predictor Model, the recent trend is the most important indicator of future success or failure since companies' fortunes rarely turn on a dime.