Z score

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Related to Z-Score Model: Altman Z Score

Z score

[′zē ‚skȯr]
(statistics)
A measure of how many standard deviations a raw score is from the mean.
References in periodicals archive ?
This study is an effort to identify the best financial and accounting variables which preeminently discriminate bankrupt companies form non-bankrupt companies, to develop Z-Score model through a procedure identical to that of Altman's (1968) using multivariate statistical technique of discriminant analysis and logit model to provide a reliable tool as Internal rating bases (IRB) model in Pakistani context to banking industry for the credit evaluation of corporate loan applicants.
Bandyopadhyay (2006) developed Z-score model for Indian corporates by using working capital/total assets, cash profits/total assets, total non-current and current borrowings/total assets, operating profit/total assets, and sales/total assets ratios, and compared the results with Altman's 4 and 5 ratios models, and found his new Z-score had higher prediction accuracy both for solvent and defaulted firms.
Can Altman Z-Score Models Predict Business Failures in Greece.
Altman-Nammacher (1987) suggest that a modified Z-score model used to predict bankruptcy can also be used to predict default for these high-yield bonds or as a gauge of changes in credit quality.
Note that if the book value variation of the Z-score model was used instead (substituting the book value of equity of $156.
The original Z-score model was revised and modified several times in order to find the scoring model more specific to a particular class of firm (for a detailed presentation of the different developments please refer to Altman and Narayan, 1997 and Altman, 2000).
The following UK-based z-score model of Taffler (1983, 1984) and Agarwal and Taffler (2007) employed in this study is derived in a similar way to Altman (1968) using a discriminant modeling approach:
Stern School of Business and the inventor of Z-Score model.
Techniques used for analyzing the data was Z-score model, mean, standard deviation, co-efficient of variation and graphs.
As such, the Z-Score model, which was originally intended to track the possibility of domestic manufacturing company bankruptcies, was updated and re-released in the mid-1990s.
By means of his analytical method he got the following formula known as the Altman's bankruptcy predictive model or the Z-Score model, which is used for companies listed at the capital market: