Define: Z Score

UK Accounting Glossary

Definition: Z Score


Quick Summary of Z Score


The Z Score is a multivariate formula used to gauge a business’s susceptibility to failure.



What is the dictionary definition of Z Score?

Dictionary Definition


The Z Score is a multivariate formula, first devised in 1968 by Edward I. Altman (Assistant Professor of Finance at New York University), that aims to gauge the susceptibility of a business to failure.

An entity’s score is calculated by applying beta coefficients to a number of selected ratios taken from an organisation’s final accounts using the multiple discriminant analysis technique.

In 1983, A UK-based version of the Z score was introduced by Richard J. Taffler – who is a professor of finance and accounting at Warwick Business School.


Full Definition of Z Score


A multivariate formula, first devised by Edward I. Altman in 1968.

It attempts to measure the susceptibility of a business to failure.

The Z Score is computed by applying beta coefficients to a number of selected ratios taken from an organisation’s final accounts using the multiple discriminant analysis technique.

A UK version of the Z score was introduced by Richard J. Taffler in 1983.



Z Score FAQ's



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Z Score. PayrollHeaven.com. Retrieved July 16, 2019, from PayrollHeaven.com website: https://payrollheaven.com/define/z-score/

Definition Sources


Definitions for Z Score are sourced/syndicated from:

  • Oxford Dictionary Of Economics
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 27th January 2019.