Altman Z-Score Calculator

Assess the probability that a company will go bankrupt within the next two years using the Altman Z-Score formula.

Financial Inputs

Total Assets

Total Liabilities

Working Capital

Retained Earnings

EBIT

Total Sales

Market Value of Equity

Z-Score Result

Altman Z-Score3.84Safe Zone

Z-Score vs. Safety Intervals

Overview

Assess the probability that a company will go bankrupt within the next two years using the Altman Z-Score formula.

💡

Pro Tips

What is the Altman Z-Score?: Developed by Professor Edward Altman in 1968, the Z-Score uses five financial ratios to predict the probability of corporate bankruptcy. It is over 80% accurate for predicting failures up to two years out.
What do the scores mean?: A score above 3.0 indicates a 'Safe Zone'. A score between 1.81 and 2.99 is a 'Grey Zone' (caution). A score below 1.81 is a 'Distress Zone' (high risk of bankruptcy).
Is the Z-Score applicable to all companies?: The original formula was designed for public manufacturing firms. Modified versions exist for private firms and non-manufacturing companies.

Fun Facts

"The Z-Score was one of the first multi-variate statistical techniques used in finance."
"During the 2008 financial crisis, many large banks had extremely low Z-Scores long before they collapsed."
"The formula weights EBIT (Operational Profit) more than three times as heavily as Working Capital."

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Altman Z-Score Calculator

Assess the probability that a company will go bankrupt within the next two years using the Altman Z-Score formula.

Financial Inputs

Total Assets

Total Liabilities

Working Capital

Retained Earnings

EBIT

Total Sales

Market Value of Equity

Z-Score Result

Altman Z-Score3.84Safe Zone

Z-Score vs. Safety Intervals

Overview

Assess the probability that a company will go bankrupt within the next two years using the Altman Z-Score formula.

💡

Pro Tips

What is the Altman Z-Score?: Developed by Professor Edward Altman in 1968, the Z-Score uses five financial ratios to predict the probability of corporate bankruptcy. It is over 80% accurate for predicting failures up to two years out.
What do the scores mean?: A score above 3.0 indicates a 'Safe Zone'. A score between 1.81 and 2.99 is a 'Grey Zone' (caution). A score below 1.81 is a 'Distress Zone' (high risk of bankruptcy).
Is the Z-Score applicable to all companies?: The original formula was designed for public manufacturing firms. Modified versions exist for private firms and non-manufacturing companies.

Fun Facts

"The Z-Score was one of the first multi-variate statistical techniques used in finance."
"During the 2008 financial crisis, many large banks had extremely low Z-Scores long before they collapsed."
"The formula weights EBIT (Operational Profit) more than three times as heavily as Working Capital."

Used with this

Similar tools that might be useful

AFFO Calculator

Calculate Adjusted Funds From Operations (AFFO), a key performance metric for Real Estate Investment Trusts (REITs).

AFN (Additional Funds Needed) Calculator

Determine the amount of external funding a business needs to support a projected increase in sales.

ARV Calculator (House Flipping)

Calculate After Repair Value and determine the maximum offer price using the 70% rule for real estate investors.