Financial Metric
Altman Z-Score combines several accounting ratios into a statistical screen for corporate financial distress.
Formula and measurement
The standard model combines working capital, retained earnings, operating profit, equity value and sales relative to assets using established coefficients.
PriceToWorth displays the metric from the latest suitable data available. Period definitions, share counts and provider updates can affect comparability, so users should confirm the relevant reporting period.
Why the metric matters
For the standard interpretation used by PriceToWorth, values above 3 are stronger, 1.8–3 form an intermediate zone and below 1.8 indicates elevated distress risk.
Interpretation and limitations
The original model was designed for manufacturing companies. Banks, insurers, private firms, service companies and businesses with unusual balance sheets may require alternative versions or different interpretation.
How to use it on PriceToWorth
Use the score as a warning screen alongside liquidity, debt maturities, interest coverage, cash flow, auditor commentary and recent filings. Review the trend and the inputs, not only the headline number.
Research checklist
- Check the reporting period and whether the value is trailing, annualized or forward-looking.
- Compare the company with suitable industry peers and its own history.
- Investigate sudden changes and corporate actions.
- Read the latest company filing before relying on a material figure.
- Treat a dash, Not available or NM as unavailable—not as zero.
