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.

Audio Definition/Pronunciation