Altman Z-Score Calculator
The Altman Z-Score predicts the risk of financial distress from five ratios. Enter the figures from the latest balance sheet and income statement below.
Manual entry — the classic Z-Score is a model for public manufacturing companies.
Fill every field with a figure from the latest balance sheet and income statement. What each ratio measures, and where the model breaks, is in the full article.
The 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). Each ratio captures a different kind of strength: liquidity, cumulative profitability, operating power, market cushion, and asset efficiency.
Reading the score
Below 1.81: distress zone. Between 1.81 and 2.99: gray zone. Above 2.99: safe zone. A worked set of figures — working capital 400, total assets 1,000, retained earnings 300, EBIT 200, market equity 1,500, total liabilities 400, sales 900 — gives a Z of about 4.71, firmly safe.
Where it breaks
This is the classic model for public manufacturing companies. Banks, insurers and non-manufacturers need different variants (the Z′ and Z″ scores). The full explanation is in the Altman Z-Score article. To screen the market on value and quality, use the free stock screener.
For information and education, not personalized investment advice. Investing carries a risk of capital loss.