What is your Z-score?

What is your Z-score?

Z-score as a Market Value Model

Besides watching your FR's, if you could gaze into a crystal ball and see with 70-80% accuracy if your company will be alive in 2 years, even 5 years, wouldn't you want to know?

So what is this Z-score?

Simply put, it is the mathematical model many analysts use to evaluate your business' PROBABILITY OF SUCCESS based on your financial statements. The model was first developed by Dr. Edward I. Altman in the late sixties, but has come into widespread use in the past few decades.

This calculation can predict bankruptcy within 2 years with 80% accuracy, and within 5 years with 70% accuracy.

Besides other data, banks frequently use this score when deciding who gets a loan and at what rate. You could do the same before you extend terms to others.

Big-business analysts use the Z-score as a tool to quickly diagnose a company's investment-worthiness, and then probe deeper to find where profit potential is hidden, or where bleeding is killing the company.

Now you can use the same diagnostic tool to confirm your current business practices, or to give you early warning up to 5 years ahead of trouble.

It takes only a few minutes to figure out your organization's Z-score. It is free, and perhaps time very well spent?

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