Altman Z-Score

The Altman Z-score is the output of a credit-strength test that gauges a publicly-traded manufacturing company’s likelihood of bankruptcy. The Altman Z-score is based on five financial ratios that can calculate from data found on a company’s annual 10-K report. It uses profitability, leverage, liquidity, solvency, and activity to predict whether a company has a high probability of becoming insolvent.