Altman Z-Score Calculator

Calculate your company's Altman Z-Score to assess insolvency risk with this interactive tool.

Altman Z-Score Calculator

This calculator helps you determine your company's risk of insolvency using the Altman Z-Score model. It's particularly useful for financial analysts and corporate finance professionals to assess the financial health of a business.

Calculator

Results

Z-Score: -

Data Source and Methodology

All calculations are based on the Altman Z-Score model, a financial formula developed by Edward Altman in 1968. For a detailed methodology, refer to the original paper: Altman Z-Score Insolvency Predictor. All calculations adhere strictly to the formulas and data provided by this source.

The Formula Explained

The Altman Z-Score is calculated using the following formula:

Z = 1.2 * (Working Capital / Total Assets) + 1.4 * (Retained Earnings / Total Assets) + 3.3 * (EBIT / Total Assets) + 0.6 * (Market Value of Equity / Total Liabilities) + 1.0 * (Sales / Total Assets)

Glossary of Terms

  • Working Capital: Current assets minus current liabilities.
  • Retained Earnings: The accumulated portion of net income that is retained by the company rather than distributed as dividends.
  • EBIT: Earnings Before Interest and Taxes.
  • Market Value of Equity: Total market value of a company's outstanding shares.
  • Sales: Total revenue from goods sold or services provided.

How It Works: A Step-by-Step Example

Let's assume a company has the following financials:

  • Working Capital: $500,000
  • Retained Earnings: $1,000,000
  • EBIT: $750,000
  • Market Value of Equity: $2,000,000
  • Sales: $1,500,000
  • Total Assets: $4,000,000
  • Total Liabilities: $1,500,000

Using the Altman Z-Score formula, the Z-Score is calculated as follows:

Z = 1.2 * (500,000 / 4,000,000) + 1.4 * (1,000,000 / 4,000,000) + 3.3 * (750,000 / 4,000,000) + 0.6 * (2,000,000 / 1,500,000) + 1.0 * (1,500,000 / 4,000,000)

The resulting Z-Score would provide an indication of the company's financial health.

Frequently Asked Questions (FAQ)

What is the Altman Z-Score?

The Altman Z-Score is a formula used to predict the probability of a company going bankrupt within two years.

How accurate is the Altman Z-Score?

The Z-Score is a useful tool, but it should be used in conjunction with other financial assessment tools.

What is considered a good Z-Score?

A Z-Score above 3.0 is generally considered good, indicating a low probability of bankruptcy.

Can the Z-Score be used for all companies?

The original formula is best suited for manufacturing companies. Other versions of the model exist for private and non-manufacturing firms.

How often should I calculate my company's Z-Score?

Regularly, especially after significant financial events or at the end of every fiscal period.

Audit: Complete
Formula (LaTeX) + variables + units
This section shows the formulas used by the calculator engine, plus variable definitions and units.
Formula (extracted LaTeX)
\[','\]
','
Formula (extracted text)
Z = 1.2 * (Working Capital / Total Assets) + 1.4 * (Retained Earnings / Total Assets) + 3.3 * (EBIT / Total Assets) + 0.6 * (Market Value of Equity / Total Liabilities) + 1.0 * (Sales / Total Assets)
Formula (extracted text)
Z = 1.2 * (500,000 / 4,000,000) + 1.4 * (1,000,000 / 4,000,000) + 3.3 * (750,000 / 4,000,000) + 0.6 * (2,000,000 / 1,500,000) + 1.0 * (1,500,000 / 4,000,000)
Variables and units
  • T = property tax (annual or monthly depending on input) (currency)
Sources (authoritative):
Changelog
Version: 0.1.0-draft
Last code update: 2026-01-19
0.1.0-draft · 2026-01-19
  • Initial audit spec draft generated from HTML extraction (review required).
  • Verify formulas match the calculator engine and convert any text-only formulas to LaTeX.
  • Confirm sources are authoritative and relevant to the calculator methodology.
Verified by Ugo Candido on 2026-01-19
Profile · LinkedIn

Full original guide (expanded)

Altman Z-Score Calculator

This calculator helps you determine your company's risk of insolvency using the Altman Z-Score model. It's particularly useful for financial analysts and corporate finance professionals to assess the financial health of a business.

Calculator

Results

Z-Score: -

Data Source and Methodology

All calculations are based on the Altman Z-Score model, a financial formula developed by Edward Altman in 1968. For a detailed methodology, refer to the original paper: Altman Z-Score Insolvency Predictor. All calculations adhere strictly to the formulas and data provided by this source.

The Formula Explained

The Altman Z-Score is calculated using the following formula:

Z = 1.2 * (Working Capital / Total Assets) + 1.4 * (Retained Earnings / Total Assets) + 3.3 * (EBIT / Total Assets) + 0.6 * (Market Value of Equity / Total Liabilities) + 1.0 * (Sales / Total Assets)

Glossary of Terms

  • Working Capital: Current assets minus current liabilities.
  • Retained Earnings: The accumulated portion of net income that is retained by the company rather than distributed as dividends.
  • EBIT: Earnings Before Interest and Taxes.
  • Market Value of Equity: Total market value of a company's outstanding shares.
  • Sales: Total revenue from goods sold or services provided.

How It Works: A Step-by-Step Example

Let's assume a company has the following financials:

  • Working Capital: $500,000
  • Retained Earnings: $1,000,000
  • EBIT: $750,000
  • Market Value of Equity: $2,000,000
  • Sales: $1,500,000
  • Total Assets: $4,000,000
  • Total Liabilities: $1,500,000

Using the Altman Z-Score formula, the Z-Score is calculated as follows:

Z = 1.2 * (500,000 / 4,000,000) + 1.4 * (1,000,000 / 4,000,000) + 3.3 * (750,000 / 4,000,000) + 0.6 * (2,000,000 / 1,500,000) + 1.0 * (1,500,000 / 4,000,000)

The resulting Z-Score would provide an indication of the company's financial health.

Frequently Asked Questions (FAQ)

What is the Altman Z-Score?

The Altman Z-Score is a formula used to predict the probability of a company going bankrupt within two years.

How accurate is the Altman Z-Score?

The Z-Score is a useful tool, but it should be used in conjunction with other financial assessment tools.

What is considered a good Z-Score?

A Z-Score above 3.0 is generally considered good, indicating a low probability of bankruptcy.

Can the Z-Score be used for all companies?

The original formula is best suited for manufacturing companies. Other versions of the model exist for private and non-manufacturing firms.

How often should I calculate my company's Z-Score?

Regularly, especially after significant financial events or at the end of every fiscal period.

Audit: Complete
Formula (LaTeX) + variables + units
This section shows the formulas used by the calculator engine, plus variable definitions and units.
Formula (extracted LaTeX)
\[','\]
','
Formula (extracted text)
Z = 1.2 * (Working Capital / Total Assets) + 1.4 * (Retained Earnings / Total Assets) + 3.3 * (EBIT / Total Assets) + 0.6 * (Market Value of Equity / Total Liabilities) + 1.0 * (Sales / Total Assets)
Formula (extracted text)
Z = 1.2 * (500,000 / 4,000,000) + 1.4 * (1,000,000 / 4,000,000) + 3.3 * (750,000 / 4,000,000) + 0.6 * (2,000,000 / 1,500,000) + 1.0 * (1,500,000 / 4,000,000)
Variables and units
  • T = property tax (annual or monthly depending on input) (currency)
Sources (authoritative):
Changelog
Version: 0.1.0-draft
Last code update: 2026-01-19
0.1.0-draft · 2026-01-19
  • Initial audit spec draft generated from HTML extraction (review required).
  • Verify formulas match the calculator engine and convert any text-only formulas to LaTeX.
  • Confirm sources are authoritative and relevant to the calculator methodology.
Verified by Ugo Candido on 2026-01-19
Profile · LinkedIn

Altman Z-Score Calculator

This calculator helps you determine your company's risk of insolvency using the Altman Z-Score model. It's particularly useful for financial analysts and corporate finance professionals to assess the financial health of a business.

Calculator

Results

Z-Score: -

Data Source and Methodology

All calculations are based on the Altman Z-Score model, a financial formula developed by Edward Altman in 1968. For a detailed methodology, refer to the original paper: Altman Z-Score Insolvency Predictor. All calculations adhere strictly to the formulas and data provided by this source.

The Formula Explained

The Altman Z-Score is calculated using the following formula:

Z = 1.2 * (Working Capital / Total Assets) + 1.4 * (Retained Earnings / Total Assets) + 3.3 * (EBIT / Total Assets) + 0.6 * (Market Value of Equity / Total Liabilities) + 1.0 * (Sales / Total Assets)

Glossary of Terms

  • Working Capital: Current assets minus current liabilities.
  • Retained Earnings: The accumulated portion of net income that is retained by the company rather than distributed as dividends.
  • EBIT: Earnings Before Interest and Taxes.
  • Market Value of Equity: Total market value of a company's outstanding shares.
  • Sales: Total revenue from goods sold or services provided.

How It Works: A Step-by-Step Example

Let's assume a company has the following financials:

  • Working Capital: $500,000
  • Retained Earnings: $1,000,000
  • EBIT: $750,000
  • Market Value of Equity: $2,000,000
  • Sales: $1,500,000
  • Total Assets: $4,000,000
  • Total Liabilities: $1,500,000

Using the Altman Z-Score formula, the Z-Score is calculated as follows:

Z = 1.2 * (500,000 / 4,000,000) + 1.4 * (1,000,000 / 4,000,000) + 3.3 * (750,000 / 4,000,000) + 0.6 * (2,000,000 / 1,500,000) + 1.0 * (1,500,000 / 4,000,000)

The resulting Z-Score would provide an indication of the company's financial health.

Frequently Asked Questions (FAQ)

What is the Altman Z-Score?

The Altman Z-Score is a formula used to predict the probability of a company going bankrupt within two years.

How accurate is the Altman Z-Score?

The Z-Score is a useful tool, but it should be used in conjunction with other financial assessment tools.

What is considered a good Z-Score?

A Z-Score above 3.0 is generally considered good, indicating a low probability of bankruptcy.

Can the Z-Score be used for all companies?

The original formula is best suited for manufacturing companies. Other versions of the model exist for private and non-manufacturing firms.

How often should I calculate my company's Z-Score?

Regularly, especially after significant financial events or at the end of every fiscal period.

Audit: Complete
Formula (LaTeX) + variables + units
This section shows the formulas used by the calculator engine, plus variable definitions and units.
Formula (extracted LaTeX)
\[','\]
','
Formula (extracted text)
Z = 1.2 * (Working Capital / Total Assets) + 1.4 * (Retained Earnings / Total Assets) + 3.3 * (EBIT / Total Assets) + 0.6 * (Market Value of Equity / Total Liabilities) + 1.0 * (Sales / Total Assets)
Formula (extracted text)
Z = 1.2 * (500,000 / 4,000,000) + 1.4 * (1,000,000 / 4,000,000) + 3.3 * (750,000 / 4,000,000) + 0.6 * (2,000,000 / 1,500,000) + 1.0 * (1,500,000 / 4,000,000)
Variables and units
  • T = property tax (annual or monthly depending on input) (currency)
Sources (authoritative):
Changelog
Version: 0.1.0-draft
Last code update: 2026-01-19
0.1.0-draft · 2026-01-19
  • Initial audit spec draft generated from HTML extraction (review required).
  • Verify formulas match the calculator engine and convert any text-only formulas to LaTeX.
  • Confirm sources are authoritative and relevant to the calculator methodology.
Verified by Ugo Candido on 2026-01-19
Profile · LinkedIn
Formulas

(Formulas preserved from original page content, if present.)

Version 0.1.0-draft
Citations

Add authoritative sources relevant to this calculator (standards bodies, manuals, official docs).

Changelog
  • 0.1.0-draft — 2026-01-19: Initial draft (review required).