• The Altman Z-Score is a formula for determining whether a company, especially in manufacturing, is approaching bankruptcy.

  • The formula takes into account the coefficients of profitability, debt load, liquidity, solvency and activity.
  • An Altman Z-score close to 0 suggests that the company may be on the verge of bankruptcy, while a score close to 3 suggests that the company is in a sound financial position.