ZFinance glossary

Z-Score

Quick definition

An indicator of a company's bankruptcy risk.

Overview

The Z-score is a mathematical formula used to predict the probability of a company going bankrupt, by analysing several financial ratios.

Common uses

  • Solvency analysis
  • Predicting financial distress
  • Risk assessment

Examples of use in small businesses

  • Monitoring financial health
  • Risk reduction strategies
  • Financial planning
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