Altman Z-Score
A formula combining five financial ratios into a single score that estimates a company's risk of bankruptcy.
Devised by Edward Altman in 1968, the Z-Score blends profitability, leverage, liquidity, solvency and activity ratios into one number. Conventionally, above ~3.0 signals financial health, below ~1.8 signals distress and elevated bankruptcy risk, with a grey zone between. It's a quick screen for balance-sheet danger.
It's most reliable for manufacturing companies (where it was derived) and less so for financials or asset-light tech. Like any single score it's a flag, not a diagnosis — but a low Z-Score is a reason to look harder before buying.
On StockSetups
The Altman Z-Score is a screener field on StockSetups, so you can filter out balance-sheet-fragile names — useful when a low-priced breakout might be a company in trouble.
Related terms
Get daily signals & real-time alerts.
StockSetups scans ~12,300 US stocks & ETFs after every close and sorts every long setup into four ranked lanes — each with a trade plan — plus an always-on engine firing 35+ real-time intraday alerts. Free for 7 days, cancel in one click.
Start free — 7-day full access →