| The Altman Z-Score is a statistical tool used to measure the likelihood that a company will go bankrupt. It is based on five financial ratios that can be calculated from data found on a company's annual 10K report. A score below 1.8 means the company is probably headed for bankruptcy, while companies with scores above 3 are not likely to go bankrupt. In 2007, the credit ratings of specific asset-related securities had been rated higher than they should have been. The Altman Z-score indicated that the companies' risks were increasing significantly and may have been heading for bankruptcy. |
