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Altman Z-Score calculator

Enter a few figures from a balance sheet and an income statement to get a company’s Z-Score, its zone (safe, grey, distress) and what drives it. Three versions: the original Z for listed manufacturers, Z′ for private companies, Z″ for other businesses.

Your assumptions
Balance sheet, end of the fiscal year
Current assets − current liabilities
In equity, on the balance sheet
Income statement
Not used by Z″
All debts and liabilities
Share price × shares outstanding; used by Z
Shareholders’ equity; used by Z′ and Z″
Result
Z-Score · Z · listed manufacturers
2.89
Safe above 2.99, distress below 1.81.
Grey zone
X1 · working capital / assets0.180.150 × 1.200
X2 · retained earnings / assets0.350.250 × 1.400
X3 · operating income / assets0.260.080 × 3.300
X4 · equity / liabilities0.901.500 × 0.600
X5 · revenue / assets1.201.200 × 1.000

The starting values describe a fictitious company. Replace them with your own; nothing you type leaves your browser.

What the Altman Z-Score measures

Edward Altman published the Z-Score in 1968 in The Journal of Finance: five ratios, weighted by a discriminant analysis of 66 US manufacturers, half of which had gone bankrupt. It measures how close a company’s financial profile is to that of companies that failed. It is a warning indicator, not a forecast, and it says nothing about the share price being high or low.

History, a worked example and the limits: our article on the Altman Z-Score.

The three formulas

Z = 1.2·X1 + 1.4·X2 + 3.3·X3 + 0.6·X4 + 1.0·X5 (X4 = market value of equity / total liabilities)Z′ = 0.717·X1 + 0.847·X2 + 3.107·X3 + 0.420·X4′ + 0.998·X5 (X4′ = book equity / total liabilities)Z″ = 6.56·X1 + 3.26·X2 + 6.72·X3 + 1.05·X4′
  • Z: safe above 2.99, distress below 1.81
  • Z′: safe above 2.90, distress below 1.23
  • Z″: safe above 2.60, distress below 1.10

Which version to use

  • Listed manufacturer: Z, the original formula.
  • Private company: Z′, which uses book equity because there is no market value.
  • Retailer, service company, non-manufacturer: Z″, which drops the revenue-to-assets ratio, since asset turnover varies too much between industries.
  • Bank or insurer: none of them. Their leverage is their business model, and all three versions put almost all of them in distress.

What the score does not say

A distress-zone score does not announce a bankruptcy, and a safe-zone score does not protect from a sudden shock. Heavy buybacks shrink retained earnings and equity and can push a sound company down. On 7 November 2026, 21% of the large non-financial companies InvestIQ follows were in the distress zone on the original formula (stock market statistics).

Read the score with cash, debt maturities and the trend of the accounts, which the Piotroski F-Score calculator measures.

Questions

What is a good Altman Z-Score?

For a listed manufacturer, above 2.99 is the safe zone; between 1.81 and 2.99, the grey zone; below 1.81, the distress zone. The thresholds differ for Z′ (1.23 and 2.90) and Z″ (1.10 and 2.60).

Can I use it for a bank?

No. Banks’ and insurers’ leverage is their business model; all three versions put almost all of them in distress.

Where do I find the figures?

In the annual report: total assets, current assets and liabilities, retained earnings and total liabilities on the balance sheet; operating income and revenue on the income statement. For large US companies, our company financials pages link each 10-K.

Is my data stored?

No. The calculation runs in your browser; nothing you type is sent or kept.

See it on a real company.

InvestIQ’s Stock Analysis computes the Altman Z-Score and the Piotroski F-Score of every stock it covers, with the other quality measures and what moves them.

Educational tool. The result depends entirely on your assumptions. Not investment advice.