A steep decline in working capital and a skyrocketing total debt-to-EBITDA fuels our suspicion that Ferrellgas Partners, L.P. might be heading towards bankruptcy in the coming year.
Employing more than 4,000 employees, the Kansas-based company engages in the retail distribution of propane and related equipment sales. They have dwelled in the FRISK® score "red zone" of heightened bankruptcy risk for more than 18 months:
This High Risk Report covers the timeline of Ferrellgas Partners, L.P., leading up to their drop to a FRISK®score of "1," indicating up to a 50% chance of bankruptcy before 2019 is over.
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Our FRISK® score model incorporates four powerful risk inputs:
- “Merton”-type model of stock market capitalization and volatility
- Financial ratios, including those used in the Altman Z”-Score Model
- Bond agency ratings from Fitch, Moody's, and DBRS Morningstar
- Website click pattern data from CreditRiskMonitor® subscribers, representing key credit decision-makers at more than 35% of current Fortune 1000 companies plus thousands of other large companies worldwide
Since the start of 2017, the FRISK® score’s rate of success in capturing public company bankruptcy is 96%. In any given year, you can count on one hand the times we miss – and in those outlier cases, the circumstances deal with unusual, unforeseen events such as natural disasters and CEO fraud.
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About High Risk Reports
Our High Risk Reports feature companies that are exhibiting a significantly high level of financial distress, as indicated by our proprietary FRISK® score.
The reports highlight the factors that have pushed a company's score lower on the "1" (worst) to "10" (best) FRISK® score, which is 96% accurate in predicting bankruptcy over a 12-month period. The High Risk Reports also includes analysis on financial indicators such as the company’s DBT index, stock performance, financial ratios and how it is performing relative to its industry peers.
The ultimate goal of the High Risk Report series is two-part: provide an early warning for those doing business with an increasingly distressed company and inform of the many signals that should be examined when assessing financial risks.