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THE Z SCORE CALCULATOR

Note:

The Z Score is not intended to predict when a firm will file a formal declaration of bankruptcy. It is instead a measure of how closely a firm resembles other firms that have filed for bankruptcy. It is a measure of corporate financial distress, a measure of economic bankruptcy.

Calculate your Z Score

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*enter equity value if not known

The Definition of the Z Score:

The model uses five financial ratios that combine in a specific way to produce a single number. This number, called the Z Score, is a general measure of corporate financial health.

The Z Score is calculated by multiplying each of several financial ratios by an appropriate coefficient and then summing the results. The ratios rely on the following financial measures. Use balance sheet figures from the end of the reporting period for all Z Score calculations.

Total Assets ($) = The total of all Assets of the Balance Sheet.

Retained Earnings ($) = Found in the Equity section of the Balance Sheet.

EBIT (Earnings Before Interest and Taxes) ($) = Net Income; add back any income tax expenses and subtract any income tax benefits; then add back any interest expenses. (Includes the income or loss from operations and from any unusual or extraordinary items but not the tax effects of these items)

Market Value ($) = The number of shares of common and preferred stock outstanding times the price per share, compared.

Net Worth; Shareholders' Equity; or Equity ($) = Total Assets minus Total Liabilities.

Book Value of Total Liabilities ($) = The sum of all current and long-term liabilities from the Balance Sheet.

Sales ($) = Revenues from the Income Statement, including other income.