Measuring the 'FiscalFitness' of a company:
The Altman ZScore
In
the early 60's Edward Altman, using Multiple Discriminant Analysis
combined a set of 5 financial ratios to come up with the Altman
ZScore. This score uses statistical techniques to predict a company's
probability of failure using the following 8 variables from a company's
financial statements:
The ones in Green are from the Income
Statement and the ones in Red from
the Balance Sheet
Use
the following ZScore
Insolvency Prediction Calculator to
assess a company.
