Work out altman z score instantly with clear inputs, formula shown and shareable results.
This is the Altman Z''-score, the variant calibrated for private and non-manufacturing companies. It weights liquidity, cumulative profitability, operating profitability and balance sheet strength; above 2.6 is the safe zone, below 1.1 signals elevated distress risk.
Altman Z''
Z'' = 6.56 x (WC/TA) + 3.26 x (RE/TA) + 6.72 x (EBIT/TA) + 1.05 x (Equity/Total liabilities)
Zones
Above 2.60 safe; 1.10 to 2.60 grey; below 1.10 distress
Statistical screening indicator only. A Z-score is not a credit rating or a prediction of insolvency and should not be relied on for lending, investment or legal decisions.
The original uses market value of equity and a sales/assets term, which only works for listed manufacturers. The Z'' variant drops both.
It is a screening tool with good historical accuracy one to two years out, not a prediction. Treat a grey-zone result as a prompt to investigate, not a verdict.