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Simple Z-score Calculator (UK)

Description

One of the tools used by financial analysts to assess the viability of a business is Altman’s Z-score. Corporate failure is linked to a series of actions which are related to a company’s fundamentals which long-term reflect the likelihood of a business going bankrupt. According to this statement, Prof.E.I.Altman developed in 1968 a multivariate statistical model considering a linear combination of several financial ratios that allow to differentiate between failing companies a non-failing ones.

The result obtained from the model gives what is known as the Z-score. Low values indicate the company has a high probability of failing while high values predict the company is less likely to fail. In fact, Altman’s seminal work predicted correctly 72% of the bankrupted companies two years prior to the event.

However, the Z-score is an explanatory tool rather than an instrument to forecast business viability, and this tool should only be used as a baseline or a first approach to viability assessment. For instance, it is suggested to analyse thoroughly those companies with lower Z-index values while resources and time can be saved with those obtaining higher values.

This app includes the model that R.Taffler calculated for UK companies. Likewise, it can be established that Taffler's z-scores with negative values lead to companies with high probability of default while those with positive values can be considered as in better financial stance.

An estimate of the probability of default is calculated by using a logistic cumulative function.

You are allowed to use this product only within the laws of your country/region. SharewareOnSale and its staff are not responsible for any illegal activity. We did not develop this product; if you have an issue with this product, contact the developer. This product is offered "as is" without express or implied or any other type of warranty. The description of this product on this page is not a recommendation, endorsement, or review; it is a marketing description, written by the developer. The quality and performance of this product is without guarantee. Download or use at your own risk. If you don't feel comfortable with this product, then don't download it.

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