Altman, Edward

Edward Altman is an American finance professor known for developing the Altman Z-Score, a formula used to assess the credit risk of companies and predict likelihood of bankruptcy. Introduced in the 1960s, the Z-Score uses financial ratios from a company's balance sheet to calculate a score that indicates financial health. A lower score suggests higher bankruptcy risk, while a higher score indicates stability. This tool is widely utilized by investors, analysts, and financial institutions to gauge company performance and make informed investment decisions. Altman's work has significantly impacted financial analysis and risk management in corporate finance.