Altman Z-Score

A financial health score predicting bankruptcy risk within two years. Combines five ratios: working capital, retained earnings, EBIT, and revenue (all relative to total assets) plus market cap relative to total liabilities. Scores above 2.99 indicate a safe zone, 1.81 to 2.99 a grey zone of moderate risk, and below 1.81 a distress zone. Developed by Edward Altman in 1968, it remains one of the most widely used credit-strength indicators.