Credit Rating Model Calculator (Z-Score)
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.
Interactive Z-Score Calculator
Results
Z-Score
N/A
Data Source and Methodology
All calculations are rigorously based on the Altman Z-Score model.
The Formula Explained
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.
Frequently Asked Questions (FAQ)
What is the Z-Score model?
The Z-Score model is used to predict the probability of a company entering bankruptcy within the next two years.