Risk of financial distress

The Altman Z-Score uses 5 basic measures of financial performance to assess the financial health and resilience of a company. The model is deployed in investment and credit decisions, e.g. through automated credit rating systems of many banks.

Predicting the risk of financial distress, the Altman Z-Score is considered to be 72% accurate for a time horizon of two years, and 80 to 90% accurate for the next year.
However, neither success nor distress of a company is predestined. Experience, skill, and commitment of the management can turnaround a company and create success out of a challenging situation. Among other things, an early analysis and swift plan to action is key. Leverage Experts is proficient in maneuvering companies through rough waters. Our team has delivered successful turnarounds and saved companies in distress.

Calculating and interpreting the Altman Z-Score

The Altman Z-Score classifies companies in three segments: a score between 1.1 and 2.6, is considered to be a safe zone.

To calculate the Altman Z-Score for your company, you will need your most up-to-date balance sheet and profit & loss statement. None of the data used to assess your financial risk is recorded or stored. Your information will remain private and confidential.

Total Assets ?
Total Liabilities ?
Retained earnings ?
Earnings before interest and tax (EBITDA) ?
(estimated) market value of equity?
Working Capital ?
Sales?

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