Altman Z-Score Calculator

Adjust the calculator values below

Altman Z-score 3.51
Working capital / total assets 0.19
Retained earnings / total assets 0.25
EBIT / total assets 0.23
3.51
Altman Z-score Combines liquidity, profitability, leverage, and turnover ratios into the classic Altman bankruptcy-risk score.
Financial Calculator

Altman Z-Score Calculator

Use this altman z-score with working capital, retained earnings, and ebit to estimate costs, returns, payments, or rates and get a practical breakdown...

The score combines working capital, retained earnings, EBIT, market value of equity, liabilities, sales, and total assets. It should be reviewed with current filings, cash flow, debt maturity, industry context, and qualitative risk factors.

What is Altman Z-Score?

Altman Z-Score is a financial distress screening model that combines several accounting and market measures into one score. It is often used as a quick bankruptcy-risk indicator for public manufacturing-style companies.

The score combines working capital, retained earnings, EBIT, market value of equity, liabilities, sales, and total assets. It should be reviewed with current filings, cash flow, debt maturity, industry context, and qualitative risk factors.

How to calculate Altman Z-Score? The Altman Z-Score formula

The classic formula is Z = 1.2 x working capital/assets + 1.4 x retained earnings/assets + 3.3 x EBIT/assets + 0.6 x market value of equity/liabilities + sales/assets.

This calculator can derive net working capital from accounts receivable, inventory, and accounts payable; market value of equity from shares and share price; and retained earnings from net income minus dividends. You can then review each ratio used in the final score.

  • Net working capital = accounts receivable + inventory - accounts payable.
  • Market value of equity = shares outstanding x share price.
  • Retained earnings estimate = net income - dividend per share x shares outstanding.

How to interpret the Altman Z-Score?

A score above 2.99 is commonly treated as a safe zone, 1.81 to 2.99 as a gray zone, and below 1.81 as a distress zone. These thresholds are screening bands, not certainties.

Use the result to identify scenarios that deserve deeper review. Asset quality, liquidity, refinancing risk, accounting changes, one-time gains, cyclical revenue, and industry differences can all change the real credit picture.

FAQs

A negative Altman Z-Score can occur when profitability, working capital, or retained earnings are weak relative to assets and liabilities. It usually calls for deeper review rather than an automatic conclusion.

The original public manufacturing formula is not ideal for every company. Private firms, banks, insurers, startups, and asset-light businesses may need different credit models.

Frequently asked questions

Common questions about altman z-score, assumptions, costs, rates, and how to read the result before making a money decision.

How is altman z-score calculated?

altman z-score is calculated from academic inputs such as Working capital and Retained earnings. Weighted calculators multiply each score by its weight before combining results.

Do assignment weights affect altman z-score?

Yes. A heavily weighted exam or project can change the final result more than several lightly weighted assignments. Check the syllabus weighting before interpreting the result.

Why is my altman z-score different from my school portal?

School systems may use dropped scores, category weights, late penalties, extra credit, minimum grades, or rounding rules that are not visible from the raw scores alone.

What score do I need to reach a target altman z-score?

Use the current grade, remaining assignment weights, and target grade to estimate the score needed. The answer depends on how much graded work remains.

Should I round grades while calculating altman z-score?

Avoid rounding intermediate scores. Round only the final result unless your class or school policy specifies a different rule.

Can altman z-score predict my final grade exactly?

It can estimate the final grade when the weights and scores are correct. It cannot account for policy changes, ungraded work, or instructor adjustments unless you include them.