Altman Z-Score Bankruptcy Prediction Calculator

Any single one of the 20 or so acknowledged financial ratios cannot adequately evaluate the overall strength of a company, although each of them can be extremely useful in identifying specific strengths and weaknesses that contribute to the general financial health of the firm.

The Z-Score Bankruptcy Predictor combines several of the most significant variables in a statistically derived combination that was first published by Dr. Edward I. Altman in 1968 (See The Journal of Finance, September, 1968.) It was originally developed on a sampling of manufacturing firms. However, the algorithm has been consistently reported to have a 95% accuracy of prediction of bankruptcy up to two years prior to failure on non manufacturing firms as well. There have been many other bankruptcy predictors developed and published. However, none has been so thoroughly tested and broadly accepted as the Altman Z-Score.

Download a spreadsheet to compute the Altman Z-Score, attached below. Spreadsheet courtesy of CAMELS' Eye Limited