Credit Rating Model Calculator
Estimate Altman's Z-Score with transparent ratios so you can assess a firm's creditworthiness in seconds.
Financial Inputs
Provide the latest balance-sheet and income statement figures, all values in USD.
Higher is stronger; lower indicates elevated insolvency risk.
How to Use This Calculator
Enter the latest working capital statement, retained earnings, EBIT, market equity, liabilities, and sales. Click Calculate to see the Z-Score and supporting financial ratios update immediately.
- Values should reflect the same reporting period (e.g., the last trailing twelve months).
- Use rounded thousands for large firms—this tool keeps consistent precision through formatting.
- The Z-Score combines five ratios; each KPI row mirrors the numerator / denominator used in the Altman formula.
Methodology
The calculator implements the Altman Z-Score, a weighted sum of five financial ratios. Each component uses the values you provide, ensuring the result reflects the same assumptions you share with lenders and auditors.
Results are estimates for informational use only and do not replace a full credit analysis or auditor review. Always triangulate with financial statements and external ratings before making decisions.
Full original guide (expanded)
This calculator is designed for corporate finance professionals to estimate credit ratings using the Z-Score model. It helps in assessing the financial health of a company by evaluating key financial metrics.
All calculations are rigorously based on the Altman Z-Score model.
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) + 0.999 (Sales / Total Assets)
Glossary of Variables
- Working Capital: Current assets minus current liabilities.
- Total Assets: The total book value of a company's assets.
- Retained Earnings: Accumulated profits not distributed as dividends.
- EBIT: Earnings before interest and taxes.
- Market Value of Equity: Share price multiplied by shares outstanding.
- Total Liabilities: All debts and obligations.
- Sales: Revenue for the same period.
FAQ
What is the Z-Score model?
The Z-Score model predicts the probability of a company entering bankruptcy within the next two years using a blend of profitability, liquidity, leverage, and activity ratios.