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Instrument · three variants, nothing stored

Altman Z-Score calculator: every weighted term and what it contributes

Enter the figures from a balance sheet and income statement, choose the variant that fits the company, and the calculator shows each of the five terms with its own contribution, because knowing which term dragged a score down is the part that points at the filing.

Written under the standing byline R. Devlin screening and filings

Z-Score: public manufacturer variant

01.812.995
The grey zone is a finding, not a hedge: the band where the original analysis discriminated no better than chance. The two thresholds move with the variant, so the private and non-manufacturer forms redraw this scale rather than reuse it.
Z-Score
0.00weighted sum of the terms
Zone
—Altman's published bands
Largest contributor
—where to start reading

    Without JavaScript, the formula is written out in full below and can be computed by hand from the same figures.

    Nothing is stored or transmitted. Coefficients and zone thresholds are those published by Edward Altman; the arithmetic here is only the weighted sum.

    A slide rule in polished aluminum with its cursor hairline centered, unmarked scales, on plum felt
    A slide rule with its cursor centered. The Z-Score works the same way: five ratios, five fixed weights, one reading, and the reading is only ever as good as the figures set against it.

    The formula being computed

    For a public manufacturer: Z = 1.2·(working capital / total assets) + 1.4·(retained earnings / total assets) + 3.3·(EBIT / total assets) + 0.6·(market value of equity / total liabilities) + 1.0·(sales / total assets). Distress below 1.81, safe above 2.99, grey in between.

    The private variant re-fits every coefficient and replaces market equity with book equity: Z' = 0.717·A + 0.847·B + 3.107·C + 0.420·D + 0.998·E, with 1.23 and 2.90 as the thresholds. The non-manufacturer variant drops the turnover term because asset turnover is not comparable across service businesses. The full explanation covers what each term measures and where the model stops applying.

    Which figures to enter

    Working capital is current assets minus current liabilities. Retained earnings and total assets come straight from the balance sheet, EBIT and sales from the income statement. The equity figure depends on the variant: market capitalization for the public version, book value of equity for the other two, and the calculator relabels that field when you switch, because entering the wrong one is the most common way to produce a confidently wrong score.

    Units do not matter as long as they are consistent, since every term is a ratio. Thousands, millions or units all give the same result provided the whole set uses one scale. What does matter is using figures from the same reporting date; mixing a current market capitalization with a two-year-old balance sheet produces a number that describes no moment that ever existed.

    Why the breakdown matters more than the total

    Because the formula is a weighted sum, a score can be decomposed exactly. A company scoring 1.6 because its EBIT term is near zero is in a different situation from one scoring 1.6 because retained earnings are deeply negative after years of losses. The first is an operating problem, the second a history. The total cannot distinguish them and the term breakdown does, which is why it is shown here rather than the number alone. That is also why a single composite is a poor verdict on its own: the screening section covers what a filter silently removes before any score is computed, and the F-Score worksheet reports its failed tests for the same reason.

    FAQ

    Using the calculator

    Which variant should I use?

    The public-manufacturer version where the company is listed and industrial; the private variant where there is no market price; and the non-manufacturer variant for service businesses and emerging markets, which drops asset turnover entirely. Choosing the variant is a precondition for the number meaning anything, not a refinement.

    Why does my score move without any new filing?

    Because the public version uses market capitalization in one term, so the score changes whenever the share price does. A score quoted without a date is incomplete, and a sharp fall may reflect only a re-rating of the stock.

    What is the grey zone?

    The band between the distress and safe thresholds where the original analysis found no reliable discrimination. It is a stated finding rather than a hedge, and reporting it as "moderately risky" misrepresents what the model claims.

    Does a distress-zone score mean bankruptcy is coming?

    No. It means the ratios resemble those of companies that failed within two years in the study sample. Many companies have sat in that zone for years without failing, and the score has no view on timing.