Taiwan Semiconductor Manufacturing Company Ltd. TSM
- Market cap
- $2.40T
- P/E
- 33.1×
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Taiwan Semiconductor Manufacturing Company Ltd. (TSM) Altman Z-score
Taiwan Semiconductor Manufacturing Company Ltd.'s Altman Z-score for fiscal 2025 is 14.22, in the safe zone (above 2.99).
Altman Z-score, annual
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Annual
| Period | Altman Z-score | Change (points) |
|---|---|---|
| FY2025 | 14.22 | 3.65 |
| FY2024 | 10.57 | 3.79 |
| FY2023 | 6.77 | 1.10 |
| FY2022 | 5.67 | (2.91) |
| FY2021 | 8.58 | (3.88) |
| FY2020 | 12.46 | 2.19 |
| FY2019 | 10.27 | (0.28) |
| FY2018 | 10.55 | 0.93 |
| FY2017 | 9.61 | 1.87 |
| FY2016 | 7.74 | 0.29 |
How fiscal 2025’s score is made up
| Component | This year | Year before | Result | Points |
|---|---|---|---|---|
| Working capital / total assets | 0.29 | — | 0.35 | |
| Retained earnings / total assets | 0.64 | — | 0.89 | |
| EBIT / total assets | 0.24 | — | 0.81 | |
| Market value of equity / total liabilities | 19.49 | — | 11.69 | |
| Sales / total assets | 0.48 | — | 0.48 | |
| Altman Z-score | Safe zone | 14.22 | ||
| Z″ Variant for non-manufacturing and asset-light companies (drops the sales/assets term, uses book equity) | Safe zone | 7.84 | ||
How the Altman Z-score works
Z = 1.2 × working capital ÷ total assets + 1.4 × retained earnings ÷ total assets + 3.3 × EBIT ÷ total assets + 0.6 × market value of equity ÷ total liabilities + 1.0 × revenue ÷ total assets (Altman, 1968). The market value of equity is the close on the last trading day of the fiscal year times weighted basic shares.
Z″ = 6.56 × working capital ÷ total assets + 3.26 × retained earnings ÷ total assets + 6.72 × EBIT ÷ total assets + 1.05 × book equity ÷ total liabilities (Altman, Hartzell and Peck, 1995), the variant for non-manufacturing and asset-light companies.
| Zone | Z | Z″ |
|---|---|---|
| Safe zone | above 2.99 | above 2.60 |
| Grey zone | 1.81–2.99 | 1.10–2.60 |
| Distress zone | below 1.81 | below 1.10 |
Not worked out for banks, insurers and REITs, whose balance sheets the model does not describe, nor when a figure is missing or there is no share price in the week to the fiscal year end.
Altman Z-score against peers
| Company | Altman Z-score |
|---|---|
| NVDA NVIDIA Corporation compare | 61.1× |
| ARM ARM Holdings PLC Sponsored ADR compare | 41.7× |
| AMD Advanced Micro Devices, Inc. compare | 16.0× |
| TSM Taiwan Semiconductor Manufacturing Company Ltd. | 14.2× |
| AVGO Broadcom Inc. compare | 12.7× |
| TXN Texas Instruments Incorporated compare | 8.7× |
| MRVL Marvell Technology, Inc. compare | 5.9× |
| MU Micron Technology, Inc. compare | 4.7× |
| INTC Intel Corporation compare | 1.9× |
What Altman Z-score is
The Altman Z-Score weighs working capital, retained earnings, operating profit, market value and sales against assets and debts to gauge the risk of distress.
1.2 × working capital ÷ total assets + 1.4 × retained earnings ÷ total assets + 3.3 × EBIT ÷ total assets + 0.6 × market value of equity ÷ total liabilities + 1.0 × revenue ÷ total assets