CA Score

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Definition

The CA Score is used as a bankruptcy model prediction. Constructed by Jean Legault of the University of Quebec at Montreal, this model uses step-wise multiple discriminate analysis to analyze the failure rate of Canadian companies. While this calculation may have been effective at time of inception, it was strategically designed to detect failures in small Canadian businesses. (Companies with total assets between 1 - 20 million dollars).

For CA-Scores that are less than < (-0.3), these firms are classified as "failed."

Formula

The CA Score is calculated as

x1 = 4.59313 * (Stockholder Equity / Total Assets)
x2 = 4.5080 * (EBIT TTM / Total Assets)
x3 = .3936 * (Sales TTM / Total Assets)


CA Score = - 2.7616 + x1 + x2 + x3

Please note in the original classification, the x2 component is (EBIT TTM + Financial Expense TTM) over Total Assets. However, our x2 component does not include Financial Expense TTM making this calculation more stringent.

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