Z-Score Insolvency Prediction Calculator

Calculate the probability of financial distress to your business

In 1968 Edward Altman developed the Z-Score to assess a business's financial health and to predict the likelihood of financial distress.

The Z-score use 5 popular financial ratios and coefficients to describe the likelihood that a business will experience financial distress within 1 year of the financial results used, and has gained acceptance by auditors, management accountants and courts.

Today this internationally accepted model is used in database systems for loan evaluation. The Z-score has an accuracy of approximately 85% and works best for manufacturing companies, but has limited use in evaluating financial results in property companies.

Privately held manufacturing companies with a Z-score of more than 3 is classified as being in good shape and the likelihood of financial distress within the next year is considered slim. Similarly, a Z-score of below 1.8 indicates that a company is likely to face financial distress within one year or less.

Please note: We are able to benchmark your business against industry norms.

Input source reference: Privately held companies (manufacturing industry)
Green cells
are from the Income Statement /
Red cells are from the Balance Sheet

Predictive distress score

EBIT: Earnings before interest and tax
Calculate: Total revenue minus expenses, excluding tax and interest
Total assets
Calculate: Sum of all current and long-term assets
Net sales
Calculate: Total sales for the period
Market value of equity (Private entities)
Calculate: Total assets minus total liabilities (including shareholder loans)
Total liabilities
Calculate: Sum of all current and long-term liabilities
Current assets
Calculate: Sum of all current assets
Current liabilities
Calculate: Sum of all current liabilities
Retained earnings
Calculate: Sum of retained earnings balance

Please note: The above predictive scores are based upon manufacturing (privately held) industry norms, and may differ from industry to industry.
Please note that we are able to benchmark your business, whether service or manufacturing in nature. Visit our website for more information.