Altman’s Z-score model

Altman's Z-score model is a financial tool used to assess the likelihood of a company going bankrupt within two years. It combines several key financial ratios from a company's balance sheet and income statement into a single number. A higher Z-score indicates a lower risk of failure, while a lower score suggests higher risk. The model helps investors and creditors evaluate a company's financial health and make informed decisions. It’s especially useful for analyzing manufacturing firms but can be adapted for other industries as well.