Just take a look at the Z score for Teradata which is around 1 and has been for many years. The final result is they will fail, either being sold or complete liquidation. The only thing the Z score cannot predict is when. Bye bye
6 replies (most recent on top)
Whatever, go back to your cave and wait for the next herd of billy goats. You have the issue which has no cure.
It most certainly looks at cash flow through working capital and asset ratio. Just show how incompetent you are about this highly respected financial metric.
The Z score does not look at cash flow. Hence why new companies always have low scores, the same can also be true for turn arounds too.
As I said before, you need both pictures... and free cash flow trends show a companies ability to pay off debts, bills, and fund operations. They lose this, its game over fast. I sold Lucent Tech in the early 2000s after seeing those same trends. Stock was at 80, It was gone by 2006.
Z score is a red flag for sure, but it's not factual proof TDC is unrecoverable.
Revenue trends are negative......lol have fun with that. That’s the great thing about the z score, you get analysis from the income statement, balance sheet, and statement of cash flow . Just show you that your comments are of someone that knows nothing about the z score
No one said it was the Bible.
Z score is not the bible, has a 70-8-% success rate 2 years out, which is what it is implying with TD.
That said I prefer to look at free cashflow history, Accts Rec/Accts Pay backlog history, assets/liability ratio, revenue trend, and just a overall gut feeling of where the product of the company is headed.
Like the Nerdwallet commercials, you need both pictures. I've never bought our CFO's line about converting to ARR being a justification for bad numbers, but while his timing has been off by well over a year, it does seem to be heading in a positive direction now.
This also made a case for layoffs and cutting poorly producing product lines (but I am 95% convinced they executed that poorly....just not 100% because everything from the transparent rookie is word of mouth currently save AMR Consulting).
Scott Brown left TD after giving a huge rally cry at GSX for the future and growth of TD...which is now looking to be 1-3%. He left to take over financial force which is growing at 30%. His departure tell you he's not willing to stick it out for TDs VERY VERY long turn around story. Frankly, I don't know of anyone who is. It is either "can I make it a few more years to retire" or like me "time to start hunting for the next career move before Oct 2021 layoffs."