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Did you know there's a measurement that can predict whether a business will go bankrupt or not in the next 2 years?
It's called Altman’s Z-score Model.
The lower the Z-score, the higher the odds that a company is heading for bankruptcy.
A Z-score that is lower than 1.8 means
It's called Altman’s Z-score Model.
The lower the Z-score, the higher the odds that a company is heading for bankruptcy.
A Z-score that is lower than 1.8 means
that the company is in financial distress and has a high probability of bankrupcy.
A score of 3 and over means the company is in a safe zone and is unlikely to file.
A score between 1.8 & 3 means the company is in a grey area and with a moderate chance of filing for bankruptcy.
A score of 3 and over means the company is in a safe zone and is unlikely to file.
A score between 1.8 & 3 means the company is in a grey area and with a moderate chance of filing for bankruptcy.
Confusing but here's the formula👇
ζ = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E
ζ = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E
