What is Z Score?
The Z-score formula for predicting a company’s bankruptcy was first published in 1968 by Edward Altman, who was, at the time, an Assistant Professor of Finance at New York University. The formula predicts the probability that a firm will go into bankruptcy within two years. Z-scores are used to predict corporate defaults and are an easy-to-calculate control measure for the financial distress status of a company.
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OTHER TERMS BEGINNING WITH "Z"
- Zombie Firm
Zombie firms are businesses that are able to continue operating despite being insolvent or unprofitable, often relying on external support, such as loans or subsidies, to sustain their operations. These firms should typically have gone out of business due to their financial…