| 5312 Stock | | | TWD 106.00 1.00 0.93% |
Altman Z Score is one of the simplest fundamental models to determine how likely your company is to fail. The module uses available fundamental data of a given equity to approximate the Altman Z score. Altman Z Score is determined by evaluating five fundamental price points available from the company's current public disclosure documents. Check out
Trending Equities to better understand how to build diversified portfolios, which includes a position in Formosa Optical Technology. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as
signals in board of governors.
Formosa Optical Technology Company Z Score Analysis
Formosa Optical's Z-Score is a simple linear, multi-factor model that measures the financial health and economic stability of a company. The score is used to predict the probability of a firm going into bankruptcy within next 24 months or two fiscal years from the day stated on the accounting statements used to calculate it. The model uses five fundamental business ratios that are weighted according to algorithm of Professor Edward Altman who developed it in the late 1960s at New York University..
Current Formosa Optical Z Score | | | | 4.8 |
Most of Formosa Optical's fundamental indicators, such as Z Score, are part of a valuation analysis module that helps investors searching for stocks that are currently trading at higher or lower prices than their real value. If the real value is higher than the market price, Formosa Optical Technology is considered to be undervalued, and we provide a buy recommendation. Otherwise, we render a sell signal.
| First Factor | = | 1.2 * ( | Working Capital | / | Total Assets ) |
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| Second Factor | = | 1.4 * ( | Retained Earnings | / | Total Assets ) |
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| Thrid Factor | = | 3.3 * ( | EBITAD | / | Total Assets ) |
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| Fouth Factor | = | 0.6 * ( | Market Value of Equity | / | Total Liabilities ) |
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| Fifth Factor | = | 0.99 * ( | Revenue | / | Total Assets ) |
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To calculate a Z-Score, one would need to know a company's current working capital, its total assets and liabilities, and the amount of its latest earnings as well as earnings before interest and tax. Z-Scores can be used to compare the odds of bankruptcy of companies in a similar line of business or firms operating in the same industry. Companies with Z-Scores above 3.1 are generally considered to be stable and healthy with a low probability of bankruptcy. Scores that fall between 1.8 and 3.1 lie in a so-called 'grey area,' with scores of less than 1 indicating the highest probability of distress. Z Score is a used widely measure by financial auditors, accountants, money managers, loan processors, wealth advisers, and day traders. In the last 25 years, many financial models that utilize z-scores proved it to be successful as a predictor of corporate bankruptcy.
In accordance with the company's disclosures, Formosa Optical Technology has a Z Score of 4.8. This is much higher than that of the Specialty Retail sector and significantly higher than that of the
Consumer Discretionary industry. The z score for all Taiwan stocks is notably lower than that of the firm.
Formosa Z Score Peer Comparison
Stock peer comparison is one of the most widely used and accepted methods of equity analyses. It analyses Formosa Optical's direct or indirect competition against its Z Score to detect undervalued stocks with similar characteristics or determine the stocks which would be a good addition to a portfolio. Peer analysis of Formosa Optical could also be used in its relative valuation, which is a method of valuing Formosa Optical by comparing valuation metrics of similar companies.
Formosa Optical is currently under evaluation in z score category among its peers.
Formosa Fundamentals
About Formosa Optical Fundamental Analysis
The Macroaxis Fundamental Analysis modules help investors analyze Formosa Optical Technology's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Formosa Optical using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at
the intrinsic value of Formosa Optical Technology based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing
financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our
fundamental analysis page.
Pair Trading with Formosa Optical
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Formosa Optical position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Formosa Optical will appreciate offsetting losses from the drop in the long position's value.
The ability to find closely correlated positions to Formosa Optical could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Formosa Optical when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Formosa Optical - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Formosa Optical Technology to buy it.
The correlation of Formosa Optical is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Formosa Optical moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Formosa Optical Tech moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Formosa Optical can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Additional Tools for Formosa Stock Analysis
When running Formosa Optical's price analysis, check to
measure Formosa Optical's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Formosa Optical is operating at the current time. Most of Formosa Optical's value examination focuses on studying past and present price action to
predict the probability of Formosa Optical's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Formosa Optical's price. Additionally, you may evaluate how the addition of Formosa Optical to your portfolios can decrease your overall portfolio volatility.