Altman Z-Score Calculator

Online Altman Z-Score calculator

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Altman Z-Score Calculation

  • The Altman z-score formula used to predict the probability that a firm will go into bankruptcy within two years.

    Formula:

    Z = 1.2 x X1 + 1.4 x X2 + 3.3 x X3 + 0.6 x X4 + 1.0 x X5

    where:

    X1 =
    Working Capital
    Total Assets
    =
    (Current Assets - Current Liabilities)
    Total Assets
    ​ X2 =
    Retained Earnings
    Total Assets
    ​ X3 =
    Earnings before Interest and Taxes (EBIT)
    Total Assets
    ​ X4 =
    Market Value Equity
    Total Liabilities
    =
    [Market Value Per Share x Outstanding Shares (Diluted)] ÷ 1000
    Total Liabilities
    ​ X5 =
    Net Sales
    Total Assets

    Conclusion:
    Z < 1.81 = Distress zone
    Z > 2.99 = Safe zone
    1.81 < Z < 2.99 = Grey zone