Free interactive tool: Calculate the probability of financial distress to your business within the next year…

Calculate the financial health of your business and determine the likelihood of financial distress using our online Z-score calculator…

Follow this link to calculate the financial fitness of your business and determine the probability of financial distress in the near future…

Use our interactive financial fitness calculator and determine the probability of financial distress in the near future.

Please note that the current benchmark is set for privately owned manufacturing companies, and is used for illustration purposes only.

We are however able to benchmark your business against industry norms, and provide you with a comprehensive financial analysis report, which will enable you to quantitatively drive your business growth and turnaround strategies. Please follow the below link for information on the benefits to your business.

Follow this link to calculate the financial fitness of your business and determine the probability of financial distress in the near future…

What is the Z-score?

  • 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;
  • The Z-scores have 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 financials 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;

 

Author: Indus Advisory Services

Business Rescue, Turnaround and Growth Analyst. Specialising in financial analysis, growth strategy development and facilitation, business turnarounds and business rescue analysis.

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