UK Accounting Glossary
The Z Score is a multivariate formula used to gauge a business’s susceptibility to failure.
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.
A multivariate formula, first devised by Edward I. Altman in 1968.
It attempts to measure the susceptibility of a company to failure and indicates the probability of a company entering bankruptcy within the next two years.
A UK version of the Z score was introduced by Richard J. Taffler in 1983.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Z Score are sourced/syndicated and enhanced from:
This glossary post was last updated: 27th January 2019.