Altman Z-Score Business Bankruptcy Calculation

  • The Altman Z-Score Business Bankruptcy Calculation is a company scoring tool establishing a probability of failure over two years.
  • It was created by the American Edward Altman in the 60s and has since been improved.
  • It uses statistical techniques to predict the probability of business failure using eight criteria from the financial statements of a company.
  • It is necessary to bring the latest financial statements of the analyzed company to calculate it.
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Note : Please provide information as per your latest financials

Z score interpretation

  • The higher the score, more the probability of failure is low. A score above 2.9 is very good (2.6 for non-manufacturing).
  • A score below 1.23 (1.1 for non-manufacturing) indicates a very high probability of failure.
  • Scores between the two above limits represent a gray area for medium-sized companies where the risk is present but not very strong.
Contents credit to
Business Health Calculator